Report Shows Horse Industry Worth Estimated $1.5 Billion, Struggling, but Expected to Recover Over Next Four Years

IBIS World

It’s Kentucky Derby Week! While the Horse and Other Equine Production industry is worth an estimated $1.5 billion, these businesses are still struggling to recover from the recession, and will likely not recover for years to come. Demand for horses is dependent on household disposable income, activity in the horse racing industry, and the popularity of horses for recreation. Revenue has fallen in recent years with a drop in big-ticket purchases and less participation in horse-racing activities.

The single largest revenue earner for this industry is the sale of horses for racing purposes. Some horses can command price tags in the millions depending on the performance of horses in their bloodline, while prices well into the tens of thousands are more common. Male Thoroughbreds have the highest breeding value, particularly those with a proven winning track record, since they are able to mate up to 200 mares per year.

The industry is forecast to grow slowly but consistently in the next four years with further recovery in consumers’ disposable income. Similarly, consumers with more spending money will attend or take part in horse racing related activities, like gambling. These factors will enable racing facilities to generate more revenue and, therefore, offer more prize money to incentivize racers to participate. Racers will then demand more Thoroughbreds, which are known for their high quality performance.

Additionally, increased exports will facilitate revenue growth. Overall, revenue is forecast to increase 1.8% annually to $1.6 billion in the four years to 2019.