The financial crisis is threatening Kentucky’s horse-breeding industry. Wall Street bonus money is disappearing from the bloodstock business, banks’ equine lending teams are denying credit and a stronger dollar is deterring foreign buyers. Financial innovation – such as fractional ownership, online exchanges and equine hedge funds – had contributed to rising prices and an oversupply of horses in spite of falls in racing attendance. However, the annual breeding-stock sale at Keeneland, outside Lexington, Kentucky, last month yielded gross receipts of just $186m – down 46% on 2007. The amount wagered at US tracks fell 10% in November, auguring badly for owners’ prize money returns. Yearlings sold this year were bred in 2006, at close to peak prices, causing a dislocation between breeding costs that has widened into “a chasm that threatens the very viability of our industry”, warned Stacy Bearse, publisher of The Blood-Horse.

This entry was posted by Gwen Robinson on Monday, December 8th, 2008 at 5:30 and is filed under Capital markets. Edit this entry.