Equines Spurred $3 Billion in Economic Activity in the State Last Year, Study Shows
The equine industry contributed roughly $3 billion to Kentucky’s economy in 2012, according to a statewide equine survey conducted jointly by the University of Kentucky’s College of Agriculture, Food and Environment; the Kentucky Horse Council; and the National Agricultural Statistics Service of the U.S. Department of Agriculture.
The $600,000 study, which also credited the horse industry with creating 40,665 jobs last year, represents the first extensive survey of the state’s equine operations since 1977, and the first-ever comprehensive examination of the economic impact of Kentucky’s equine industry.
The survey results indicate that the lion’s share, or approximately $1.28 billion of the industry’s overall $3 billion economic impact, was generated by the racing industry. Beyond that, roughly $710 million came from the breeding sector, $635 million was generated by competitions, and $166 million resulted from recreational pursuits.
The study, which also features a county-by-county breakdown of horse inventory, estimates that 242,400 horses reside on roughly 35,000 equine operations in Kentucky. More than half of those horses are Thoroughbreds (54,000), Quarter Horses (42,000) and Tennessee Walking Horses (36,000), according to the survey findings, and the primary use for horses in the state is pleasure or trail riding, followed by breeding.
That kind of information will allow equine-related businesses and organizations to focus their efforts on pockets of equine activity in Kentucky that may have been previously overlooked, according to Anna Zinkhon, board president of the Kentucky Horse Council.
“With knowledge of how many horses are actually in each of the 120 counties, the Kentucky Horse Council can plan targeted activities that more closely track real horse populations by breed and use,” Zinkhon said. “As we analyze the data region by region, it will lead to the ability to take measured actions that are economically justified and feasible without the guesswork that we’ve done the last 30 years.”
Phase one of the study estimated a total of $23.4 billion in equine and equine-related assets in Kentucky. When compared to the value of total equine assets in states that conducted comparable studies, Kentucky far surpassed the competition, said Jill Stowe, director of UK’s Ag Equine programs and the survey’s project lead. Stowe said her research showed that Kentucky’s equine assets were almost double those reported for the next closest state, New York.
“[New York’s] study was done before the recession, and I’m sure land prices have fallen a bit since then,” Stowe said. “Just the infrastructure that exists in this state to support the equine industry is really second to none.”
In addition, the tax impact of the state’s equine industry was estimated at $134 million, including revenue collected from state income tax and sales tax, but not including money from occupational license taxes. The equine industry contributes a larger-than-average share of state sales tax as compared to other animal agriculture operations, such as cattle farms, because equine farm purchases are not exempt from Kentucky sales tax.
The $3 billion economic impact figure included both direct effects (the sale of goods and services directly attributed to the equine industry) and indirect or induced effects, including economic activities associated with other industries that serve equine interests (such as veterinary practices) and income spent by the employees who work for those businesses, Stowe said. The survey’s $3 billion estimate did not include banking, legal or accounting services for the industry; tourism revenue generated by horse interests in the state; or pari-mutuel wagering.
Stowe said the potential uses for the data collected through the survey are countless.
“The industry has really been starved for good information that they can make decisions on,” Stowe said. “I think it will be beneficial to our policymakers, who can be well informed going forward. I think for our state’s business owners and entrepreneurs, now they have data that they can put together solid business plans on. It can be used by community planners as they are working to incorporate equine-related activities like trail riding into their community plans, and by veterinarians who are trying to monitor diseases.”
In addition, Stowe said, the study provides the industry with a crucial basis for comparison as it evolves in years to come.
“It serves as a benchmark going forward,” Stowe said. “When the recession hit in 2008 and 2009, there was nothing that we could compare the results to [in order to] say how much have we contracted, but now we have some information like that.”