Cal-bred News

Bloodhorse Article on Cal-bred Incentive Program

By Bloodhorse
ARCADIA, Calif. (Mar. 22, 2008) – Given that three California-breds were Eclipse Award finalists in 2007, it is clear that horses bred in the Golden State are not short on talent. However, with dramatically decreasing foal crops, California is increasingly becoming short on state-bred competitors.

Last year, Nashoba’s Key reeled off seven consecutive victories and became a multiple Grade I winner before tasting defeat for the first time in the Emirates Airline Breeders’ Cup Filly & Mare Turf, where she finished fourth. Because she successfully raced in Grade I company on synthetic surfaces and turf, she was a finalist for both champion older female and turf female. The Silver Hawk mare has returned successfully in 2008, adding the March 9 Grade I Santa Margarita Invitational Handicap to her resume.

Joining Nashoba’s key on the 2007 Eclipse ballot were River’s Prayer, a Grade I-winning female sprinter, and Idiot Proof, a Grade I-winning sprinter. Additionally, Idiot Proof’s breeders, Marty and Pam Wygod, were on the short list for breeders of the year.

But while the racing year was kind to Cal-breds, the trends for mares bred and foals born in the state were not as impressive. The number of live foals born in California dropped 7.4% from 2006 to 2007. The year before, the number decreased 8.8%, and in 2005, it went down 1.3%. Furthermore, the number of mares bred dropped to 4,910 in 2006, from 5,236 in 2005.

“From a quality standpoint, there is no question we are breeding better horses,” said Doug Burge, executive vice president and general manager of the California Thoroughbred Breeders Association. “The concerning part is the quantity side of the equation. It is alarming especially when you look at the makeup of California racing. Cal-breds make up over 50% of the field sizes.

“We are dependent on the local product here to support the amount of racing that we have. We are talking about increasing the opportunities of Cal-breds and ways to stimulate people to invest in breeding, buying and developing young horses.”

Although fewer horses are being bred in California, the breeder incentive program continues to grow. In 2007, it awarded $8,360,000 to breeders, compared to $8,023,345 in 2006 and $7,977,938 in 2005.

Breeder awards are paid when a California-bred finishes first, second or third in any race in the state or in any graded stakes race conducted within the United States. The state also pays owner and stallion awards.

“The breeder-award percentage and the stallion-award percentage are really a function of the amount of money that comes into the program, and then you divide into that the total qualifying earnings,” said Burge. “The breeder-award percentage is around 14.6%, and the stallion award is 13.7%. The beauty of this whole program is that as the breeder, you have a 14.6% investment in horses you have bred throughout the rest of their racing career, and in most cases, without any bills.”

Burge attributes the downturn in the number of mares bred and live foals born to current economic conditions, the high costs associated with breeding and raising horses, and the loss of farms over the last few years because of land development.

“I think we are going to continue to breed better horses because of the opportunities that are there,” said Burge. “What we are really seeing is a shuffling off at the lower end. But we do need to figure out some creative ways to stimulate more investment from the breeding side so we can get the foal crop numbers back up to where they need to be.”

California is not the only western state that is looking toward innovation in order to revive its breeding program. Washington is interested in the same thing. The Evergreen State faced an even more dramatic decrease in live foals born in the state from 2006 to 2007 when it witnessed a 12.8% decrease on top of an 11.1% decrease the previous year. However, that was preceded by a 25.2% jump in 2005.

“Quality horses have always come out of the Northwest and the state of Washington,” said Duane Belvoir, who became the executive director of the Washington Thoroughbred Breeders Association at the beginning of 2008. “It is just a matter of getting more of them brought in, as well as getting the people brought in to see what we have to offer.”

In 2007, Washington paid $744,781 in incentives to breeders, compared to $696,892 in 2006 and $767,225 in 2005. Additionally, $216,809 from the fund was allocated to Emerald Downs last year because it is required to give the track 25% of the breeder awards. The state also pays owner awards, and the track receives 50% of that pot. Emerald Downs is slated to receive those funds through its 2011 meet.

When a registered Washington-bred wins any race at Emerald Downs, the breeder receives approximately 20% of the winning purse. Owner awards are paid when a registered Washington-bred finishes first, second, third or fourth in any race at the track, and they total 10-20% of the earnings.

“I think everybody is currently in a holding pattern to see exactly what occurs in the future as far as additional tracks, steroid issues and so many other things,” said Belvoir. “At the same time, the demographics of the clientele, in regards to breeders and owners, needs to be addressed throughout the country, but especially in the Northwest. It is a matter of marketing, and going out to the Internet generation and younger.”

One unavoidable circumstance Washington has been dealing with is the loss of three major stallions in the last two years. The latest was Tribunal, the 2006 leading freshman sire in the state, who died Jan. 8 after fracturing a cannon bone while recovering from anesthesia. He had been receiving extensive care for several months after injuring himself last year at El Dorado Farms. His death follows that of Polish Gift, who died in January 2007, and Petersburg, who died in December 2006.

“I feel good and confident in our stallions, but unfortunately, over the last two years, we have lost three prominent ones,” said Belvoir. “We still have a number of other prominent stallions, but if you look at the age on them, they are starting to get a little long in the tooth.”

Arizona, Colorado and Oregon also saw an increase in breeder incentives last year when compared to the year before.

Last year, Arizona paid out $683,863 in breeder awards, compared to $434,823 in 2006 and $418,126 in 2005. Breeders of Arizona-breds that are victorious in the state receive up to 36% of the winner’s share of the purse, while owners collect 15-25%.

“Like many states, our state is having some budgetary issues,” said Mike Lester, president of the Arizona Thoroughbred Breeders Association. “(The funding) comes from a percentage of unclaimed property. The program is in good shape, but what we have heard from our lobbyist is that they may sweep part of that (percentage) because of budget issues. It would affect a lot of other organizations as well.”

One effort Arizona is making to improve the quality of horses bred in the state revolves around increasing purse money for the more competitive races.

“We are trying to help breeders breed a better quality horse in Arizona,” said Lester. “The higher purses make you want to have a better-quality horse. We have some very good stallions, good bloodlines, and overall, the mares are getting better, too. We expect to continue to improve.”

“Colorado paid out $463,628.20 in breeder awards last year, compared to $414,706.60 in 2006 and $444,111.83 in 2005. Stallion and owner awards also increased in the Centennial State.

Oregon breeders received $73,512.98 in incentives last year, compared to $62,826.72 in 2006 and $49,582.87 in 2005. The state also has a healthy owners incentive program, which paid out $424,487.32 in 2007, compared to $338,989.08 in 2006 and $317,695.24 in 2005.

One state that struggled in 2007 was Nebraska, which paid out $355,841 in breeder awards, compared to $435,671 in 2006 and $343,869 in 2005. Owner awards in the state also declined to $94,133 from $116,489, but stallion awards went up to $98,683 from $92,418.