b4breeding

Number 3 of my 4 solutions for the New Zealand standardbred breeding industry is to place a limit of 100 on all NZ available stallions for the next 3 years (i.e. number of NZ mares served regardless of where the sire stands).

Many people will say there is no point in even raising this issue, because it was done and dusted many years ago when there was a legal ruling based, presumably (because I cannot find any easy reference to it) on the “restraint of trade” argument. That was the end of the matter.

But I believe a short sharp period of limited books will, in conjunction with the other 3 solutions I’m putting forward, provide a bridge to the future for our Kiwi standardbred breeding industry.

The restraint of trade argument is a strong one that carries much weight in Western economies. To be valid, any restraint must be agreed to by both parties (for example in an employment contract), the extent of the restraint needs to be reasonable, and generally there needs to be some benefit in it for both parties.

Restraint of trade is balanced by other commercial laws directing competitive behaviour and preventing cartels, anti-competitive practices, mergers that over-dominate competitive markets, plus consumer protection laws.

These things are presumably intended to set some parameters within which” the market” will usually sort itself out.

And many in the breeding industry will say that is what will happen again here, with a fertile sire like Bettor’s Delight eventually over-supplying the market and breeders moving on to other sires once the average market price takes a downward turn. It’s happened before with Vance Hanover, Sundon, In The Pocket and Christian Cullen. Maybe but given the long cycles of breeding and the current dire straits of the breeding industry, are we willing to wait and see? There are some features of the current situation – the huge dominance of one super sire for several years now; the reduced pool of broodmares; the financial situation of harness racing in general – which means we have to turn the history channel off and get out of our armchair.

So let’s start from the assumption that my proposal is not about a law change, but a change of mindset.

A change from laissez faire reliance on “market forces”, hoping they will trigger changes in time to prevent some very negative flow-on affects.

A change in attitude from “she’ll be right, we’ve seen this all before”. And letting another 3 years slide by to see if it turns out that way.

The aim is to slice the cake more equitably without over-influencing breeders’ choices, during a period where the industry is in danger of contracting to insignificance. Tweaking the market rather than totally controlling it.

What we need is a proactive willingness from stallion owners, breeders and studs. Because in hard times, it is collaboration rather than competition that pulls us through.

Limiting sires’ books over a short period will result in:

• A wider distribution of the service fees paid by breeders across studs and sire owners, which enables a healthy diversity of industry players to survive – and that protects the competitive environment of the future.
• A wider range of quality sires who will have a chance to prove themselves at stud, because history tells us that we cannot really predict who will become a top sire.
• A more diverse future broodmare pool, racing stock and even potential sires.
• A stronger representation of different types and new sires at yearling sales, giving more representation to breeders who are willing to look “outside the square”. A sire needs 20 yearlings across the sales to really break into the perception of buyers as a commercial stallion.
• And more active, adventurous thinking (hopefully) on the part of breeders when they choose a sire for their mare, instead of just following the crowd and singing the mantra “best to the best”!

So how could a book limit work in practice?

The number of sires affected is very small – probably Bettor’s Delight the most,  Mach Three and perhaps American Ideal significantly, a little bit for those sires who sit around 100 mares anyway, such as Gotta Go Cullect and Changeover, Washington VC and maybe a couple of others whose stocks are on the rise.

So initially the impact of any agreement would fall on the owners of Bettor’s Delight. And if agreement needs a sweetner,  it could be that a transition which recognises the reduction from a higher income, so it may reduce to a maximum of 175 in Year 1, 150 in Year 2 and 100 in Year 3.  Mach Three is owned by the Muscara family, but it may be that the loss of services to him results in a shift of more services to other sires they also own.

Fact is, in each year a book limit may provide a relatively small number of additional services split around other current or new sires – perhaps around 250.  The shift would initially favour other popular sires until they also reach the 100 book limit, and then breeders would need to look further afield.

Who would benefit then? There are several quality stallions who hover around the 50/60 mare mark, and are currently at a make or break point but need more time (i.e. more progeny at 3+ years) to gauge yet how good they are as sires; and there are top sires available by frozen semen or shuttling who are at risk of being withdrawn from the market because they can’t get the numbers here to justify their costs.

Book limits by agreement for a short period might not be a game changer, but it could put a “salary cap” type requirement on the “players” in our industry. It’s not a new concept in sport, or industries that look to the wider interests and not just the immediate return.

They’ve done it in America, the bastion of the free market place, so it must be possible!

Just out of interest:

Some of the general principles and pros and cons of limiting numbers of mares that a stallion can serve are canvassed in numerous articles and forums about live service vs artificial insemination, especially comparing the thoroughbred industry (which of course doesn’t allow AI foals to be registered in The Stud Book) and our standardbred industry which embraced AI many years ago. This blog on The Breed blogsite in 2009 provides quite a neat review of the pros and cons and differences between the thoroughbred and standardbred approaches – and is worth going to just to read the fantastic quote at the end of the blog from North American harness racing figure Stan Bergstein.