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John Harris* Comments on the 52% drop in California Mares covered when comparing the years of 1986 and 1996

This is in response to a request by Don Engel

Coalinga, California April 24- - -

As an agriculturist, I am constantly coping with economic cycles or corrections. These events are generally brought about when folks producing a given commodity figure out they are not making any money on it and shift their production to something else, or go out of business completely. In the long term, no one will normally continue to produce a commodity at a loss. There are exceptions in things like Thoroughbred horses that come about because people either love to produce their own horses so much that the psychological gratification outweighs the financial loss, or they feel that their losses will not continue due to optimism about the quality of their future production. Sometimes continued production makes sense if one thinks that the revenue side of the equation is going to increase dramatically and they want to have the product ready when it happens.

I believe that it is a healthy sign for current breeders that California's mares bred are off about 50% versus 10 years ago. Certainly far less money will be lost by Californians, if 4773 mares are bred rather than 10016. In this process, the quality of the Cal Breds has improved. This is especially evident when one considers that Cal Breds are winning as many, or more, races today than they were 10 years ago. Thus, a given breeder today who owns one of the 4773 mares that were bred has a much greater chance of a profitable venture than he or she did 10 years ago.

Of course, I would like to see some long term growth from this base, but first we need to revitalize the total sport of racing. We have more activities, and other forms of gaming, competing with racing than ever before and have lost rather than gained market share over the last several years. It is hard to endorse growth for growth's sake until we have a growth market out there for our product. This is not a California problem, it is a national problem.

There is a term talked about occasionally, called "right sizing". It sounds more palatable than "down sizing". I think we can have an efficient, "right size" industry breeding 4500-5000 mares per year. We do a have a challenge at this level to select credible bloodlines, get a high percentage in foal, and do a good job of raising and training them; but I really don't think we have a, "Crisis in California." We do have an, "Opportunity for Profit in California."

Another inherent question surfaces, "Is it important that CTBA, as an organization, encourage production just to see the total foal numbers go up?" I really don't think that is our role. I know the beef or cotton organizations I have been involved with never patted themselves on the back just because we overproduced. The role of an organization like CTBA is to provide as healthy of a climate as possible for our producers, the breeders. We do not have a perfect world in which we can control all the factors, but I think we do a good job in getting fair legislation for the breeding industry in California. We also have greatly improved our educational capabilities and our directors are working hard to get feedback from the members. Although we cannot control prices, market forces have worked in bringing equilibrium into the market. Recent auctions have shown an increase in demand for Thoroughbred Horses. This increase in demand, and the documented reduction in supply, will result in good sales opportunities at California auctions. Additionally, CTBA's Del Mar Sale is rebounding to its' former grandeur.

One issue that clearly needs better understanding is the Breeders' Awards part of the total Cal Bred incentive package. I believe that the Breeders' Awards are the heart of the program. No one gets one dollar of awards unless they produce a horse that can get to the races and win or place in a race in California. The more any given horse wins, the more his breeder will get. It would be foolhardy to turn this program into a program that rewarded a few horses at the top to the detriment the large number of race horses we need day in and day out to fill the races and make the sport viable.

I do not feel that a good breeder is limited to someone that can come up with the occasional "big horse". We need horses competing at many levels and often times the stakes star of tomorrow may be running for $12,500 today and the opposite also can and does happen. It is not cheap to produce horses at any level and economics encourages improvement of our total bloodstock in the state. I really believe that the economics are more favorable today then they were in 1986 for the California Thoroughbred breeders.

*John Harris is President of The California Thoroughbred Breeders Association

Harris Farms serves customers throughout the world in two California locations; Coalinga and Sanger. The total company is also engaged in diversified farming, beef production and marketing through Harris Ranch Beef Company and a large hospitality facility, Harris Ranch Restaurant and Inn. For more information on Harris Farms call 800-691-1199, or visit Harris Farms’ home page http://www.HarrisFarms.com on the World Wide Web.

Contacts: HARRIS FARMS: Debbie Lopez, John C. Harris( 559.884.2477 ) or David McGlothlin, (559.889.2859 )

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