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Tennessee's Equine Industry

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Tennessee's Equine Industry Institute of Agriculture Department of Agricultural Economics April 2010 Tennessee’s Equine Industry: Overview and Estimated Economic Impacts by R. Jamey Menard, Kaelin W. Hanks, Burton C. English and Kim L. Jensen Institute of Agriculture Department of Agricultural Economics Agricultural Experiment Station The University of Tennessee Knoxville Jamey Menard is a Research Associate. Burton C. English and Kim Jensen are Professors of Agricultural Economics. Kaelin Hanks is an Associate at Entira, Inc. Please visit the Department’s web site at http://economics.ag.utk.edu/. Additional copies of this report may be obtained from: Department of Agricultural Economics The University of Tennessee 2621 Morgan Circle Knoxville, TN 37996‐4518 (865) 974‐7231 Staff Paper SP10‐01 Funding for this study was provided in part from USDA’s Cooperative State Research, Education, and Extension Service (CSREES), through Hatch Project TEN00382. Equine photos from Microsoft Office Online Clip Art. ii Executive Summary According to the 2007 Census of Agriculture, Tennessee ranks sixth in the United States for the number of horses and ponies (142,003) and second for the number of mules, burros, and donkeys (18,350) on farms. Within Tennessee, Bedford County has the largest number of horses and ponies at 5,611; Wilson County has the largest number of mules, burros, and donkeys at 619. For 2007, total sales for Tennessee’s equine industry were $31.2 million, or 1.2 percent of total sales from all agriculture commodities for the state ($2.6 billion). Compared to the United States, Tennessee is ranked 11th in terms of market value of its equine industry. Increasing the knowledge and awareness of Tennessee’s current equine industry will aid in shaping its future. Thus, this document is structured along the following theme: First, an overview of Tennessee’s equine industry is presented. Tennessee’s rank in the United States, county ranking within the state, and total sales information, based on 2007 Agriculture Census data, are discussed. Next, a review of the state’s top five equine breeds, along with their primary usage, is presented. Tennessee’s equine associations and shows are discussed in the next section. Further, a brief overview of other states breeder incentive programs is presented. Finally, the remaining part of the document evaluates the economic impacts and importance of the equine industry for the state. The top five equine breeds in Tennessee are the Tennessee Walker, Quarter Horse, Donkey, Mule and Spotted Saddle. The primary usages of equine in Tennessee, depending on the breed, are pleasure/sport, competition, breeding, and other (used for work, teaching, retired equine, etc.). Based on responses to a 2009 informal survey, Tennessee has roughly 26 equine associations (if geographic distinctions for the same equine associations are included, for example, East Tennessee Hunter Jumper Association and West Tennessee Hunter Jumper Association). For 2008, the Hunter Jumper Association had 24 shows, followed by 15 shows for the National Spotted Saddle Horse Association, and 14 shows for the Walking Horse Owners Association. An analysis of other states‘policies indicated a broad variety of breeder incentive programs. These financial assistance policies are funded from state tax revenues or purses from races designed to support horse breeding and ownership and differ in the allocation of payments to the breeders and owners of state‐bred horses that win or place in races or shows. The type of state incentives include breeder awards, stallion awards, restricted race purses, owner awards, and “other” awards and have different policies regarding the administration, levels of funding and distribution of payments through some or all five alternative incentive policies. Tennessee’s equine industry supports a variety of activities and businesses. Based on a 2003 survey, the estimated direct annual economic impacts for total industry output for Tennessee equine ownership expenditures were $715.3 million (2010$). This level of expenditures financed over 14,500 jobs. Total value added and indirect business taxes were estimated at $360.3 million and $28.9 million, respectively. Total impacts to the state’s economy from equine expenditures were estimated at $1,396.3 million in total industry output. Estimated total number of jobs was over 20,000, with total value added estimated at over $746.0 million. Indirect business taxes from equine expenditures were estimated at $61.2 million. Using equine event/show survey expenditures from a 2006 Alabama survey , the direct economic impacts for equine shows/events for Tennessee were estimated at $22.0 million for total industry output (2010$) with total impacts estimated at $45.3 million. iii Table of Contents Page Executive Summary iii Table of Contents iv List of Tables v List of Figures v Introduction 1 Overview of Tennessee’s Equine Industry 3 Top Tennessee Equine Breeds and Primary Usage 10 Tennessee Equine Associations and Shows 13 Other States Horse Breeder Incentive Programs 14 Estimated Economic Impacts of Tennessee’s Equine Industry 15 Discussion 21 References 23 Appendix A: List of Equine Associations 26 Appendix B: Letter Requesting Information 27 Appendix C: List of Equine Shows 28 Appendix D: Equine Breeder Incentive Programs 30 Appendix E: Economic Impacts Methodology/Description 33 iv List of Tables Page Table 1. Top Ten Horse and Pony States, 2007 3 Table 2. Top Ten Mule, Burro, and Donkey States, 2007 4 Table 3. States with the Largest Total Sales for the Equine Industry, 2007 9 Table 4. Equine Expenditures for Tennessee, 2003 16 Table 5. Estimated Annual Economic Impacts for Equine Ownership Expenditures for Tennessee, 2003 18 Table 6. Tennessee Livestock Facilities Hosting Equine Events 19 Table 7. Categorical Proportion of Expenditure Totals for Major Alabama Horse Shows and Circuits, 2005 20 Table 8. Estimated Economic Impacts for Equine Events/Shows 20 List of Figures Figure 1. Number of Horses and Ponies in the United States, 2007 5 Figure 2. Number of Horse and Pony Farms in the United States, 2007 5 Figure 3. Number of Mules, Burros, and Donkeys in the United States, 2007 6 Figure 4. Number of Mule, Burro, and Donkey Farms in the United States, 2007 6 Figure 5. Number of Horses and Ponies in Tennessee, 2007 7 Figure 6. Number of Horse and Pony Farms in Tennessee, 2007 7 Figure 7. Number of Mules, Burros, and Donkeys in Tennessee, 2007 8 Figure 8. Number of Mule, Burro, and Donkey Farms in Tennessee, 2007 8 Figure 9. Market Value of Equine Products Sold, 2007 9 Figure 10. Top Tennessee Equine Breeds and Primary Usage 10 v Introduction Little documentation exists on the importance of the equine industry in Tennessee – its size, character, issues affecting growth/expansion, plus the magnitude of economic contributions to the state’s economy. Since most agricultural statistics primarily focus on‐farm food or fiber commodities (Agricultural Census1 data for example), the number of equines for pleasure horses or for other purposes on non‐farms is lacking. Available data is not updated frequently and must be drawn from a variety of sources. One of the more recent applicable sources of equine information is from a survey conducted in 2004 by Kenerson and Moore. From this survey the authors generated a report providing detailed information concerning equine statistics (inventory, number of operations, sold, and value of sales) at state and county levels, expenditures for the state, and breed information (Whiting, Molnar, and McCall, 2006; Kenerson and Moore, 2004, USDA‐NASS, 2007). Sources of income from the equine industry – horse breeding, sales, events/shows, recreation, stabling equines, and training – all contribute to the state’s economy. Although horse racing in other states has contributed to the industry’s popularity, recent growth has come largely from equestrian sports and recreation (i.e., show jumping, field hunting, driving, cutting, roping, eventing, dressage, and endurance). Equine owners/operations have to purchase equipment and services (clothing, tack, and trainers) to carry out these activities. In addition, like livestock operations, equine operations have to purchase equipment (i.e., tractors, trucks, trailers, farm structures, and fencing), purchase feed and hay, and require the services of veterinarians and farriers. The breeding of equine requires investment in farmland 1 According to the 2007 Census of Agriculture, a farm is any place from which $1,000 or more of agricultural products were produced or sold, or normally would have been sold, during the census year (NASS, 2007) 1 and other assets not economically justifiable for most other agricultural enterprises. In addition, these activities create additional tourism and recreational expenditures. Perhaps harder to quantify are the contributions from educational services and the institutional support provided by agricultural and veterinary schools for equine production and care (Offutt and Korb, 2006; Whiting, Molnar, and McCall, 2006). Increasing the knowledge and awareness of Tennessee’s current equine industry will aid in shaping its future. Thus, this document is structured along the following theme: First, an overview of Tennessee’s equine industry is presented. Tennessee’s rank in the United States, county ranking within the state, and total sales information, based on 2007 Agriculture Census data, are discussed. Next, a review of the state’s top five equine breeds, along with their primary usage, is presented. Tennessee’s equine associations and shows are discussed in the next section. Further, a brief overview of other states breeder incentive programs is presented. Finally, the remaining part of the document evaluates the economic impacts and importance of the equine industry for the state. Two types of economic impacts will be estimated. The first will use expenditure information for owning equines from the study conducted by Kenerson and Moore (2004), along with an input‐output model to determine direct impacts on related input industries and impacts through resulting expenditures by households and institutions at the state level.
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