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Stay up-to-date on the latest news and events from Georgia’s horse industry.

Arabian Horse Farm Loses Millions of Dollars (tax case)

Posted by on May 8, 2015 in News | 0 comments

A Significant Victory in a New Tax Court Case
By John Alan Cohan, Attorney at Law  
 
 

A new Tax Court case involved several million dollars of losses from 2004-2009 in an Arabian horse farm owned by Henry and Christie Metz.  [Metz v. Commissioner,T.C. Memo. 2015-54.]

The Metzes specialize in Straight Eqyptians, and established their horse farm in 1991, at a time when prices of quality Arabians had dropped significantly from the 1980s.  The Metzes believed that prices had reached their bottom.

Mrs. Metz worked full-time on farm advertising, marketing and promotion, drawing on her fine-arts background.  In 1995 the taxpayers bought a farm in Naples, Florida for $550,000, and viewed this as an ideal location.  However, costs kept increasing and losses continued to mount.  They sold the Naples property for a profit and moved operations to Santa Ynez, California, with its large concentration of Arabian horse farms, and a steady flow of buyers.

Despite millions in losses, the Metzes remained optimistic about their farm’s future.  Since 2008 they had significantly reduced their expenses and increased revenue.  In 2011 they achieved a profit for the first six months by selling five horses at an average price of $70,000.

The judge, in analyzing the Metzes’ intent, made the following findings:

The Metzes kept records in a businesslike manner, using Quickbooks, and their CPA prepared monthly bank reconciliations, accounts-payable listings, and profit-and-loss statements.  They used an attorney’s prepared contracts for horse and semen sales.  Some sales contracts to foreign buyers were unsigned by the buyer, which led the IRS to argue that this “is not the kind of problem an intelligent businessperson would leave unaddressed.”  However, the judge found that especially with customers from a different culture, “pristine perfect preset paperwork” may not always accompany every business transaction.

The Metzes maintained potential customer lists, with records of contacts made with relevant details of their discussions; and sent out professional-quality promotional materials with copies of articles featuring the Metzes’ horse activity.

They had annual written business plans that included goals, job descriptions, policies and procedures, a description of each horse, and proposed advertising and promotion opportunities for the upcoming year.  The judge rejected the IRS’s argument that the plans lacked detailed information on methods to decrease costs or increase revenues, saying the IRS was attempting to substitute its own business judgment for the Metzes’.

There was extensive advertising and promotion, including ads in trade journals, and an attractive website.  The Metzes regularly reviewed analytics to track which pages were most often read as well as the location of visitors.  A high percentage of contacts came through the website.

There were dozens of horse sales between 2004 and 2009, including some for six figures, even up to $250,000.

The IRS argued that the Metzes failed to track expenses on a per-horse basis and that this was a clear indication their books and records fell short of businesslike standards.  In other words, the lack of individualized records shows a lack of profit motive.  The judge disagreed that a horse-by-horse breakdown is required to indicate a profit motive.

The judge found that the Metzes used their records to assess economic performance and identify cost-reducing strategies.  Their records were far more organized than others found to be adequate for section 183 purposes.

The judge found that the Metzes made changes in an effort to improve profits, most notably deciding against staying in Naples, Florida and relocating to Santa Ynez for the increased foot traffic and lower costs.  The Metzes also responded to the increasing interest in the Arabian horse market from the Middle East, networking at large shows in the Middle East.  The five horses they sold in 2011, at an average price of over $70,000 per horse, were all to foreigners.

Henry Metz was president of the Pyramid Society, a society dedicated to breeding Egyptian Arabians, and he was involved in the merger of AHRA with IAHA, and “was also recognized within the industry as a businessman who had the skills to turn around not just his own farm but a very troubled Arabian horse industry.”

The judge emphasized the importance of expertise of the taxpayer and consultants not only in animal husbandry, but in the economics of the activity, and concluded that the Metzes demonstrated expertise in the economics of the activity.

The judge noted that the Metzes devoted their full time to the activity, and that “their management and development of [the farm] has been aimed at breeding horses to sell, and they’ve worked personally and with great effort.”

The judge also concluded that the significant appreciation of the taxpayers’ assets — the farm property, their horses and frozen semen — suggested a profit motive along with the other evidence.

Finally, the judge held that the long history of losses was explainable as due to customary business risks and reverses; and some of the Metzes’ problems were industrywide.  The judge also rejected the IRS’s argument that the Metzes could never recoup their losses, stating that “if a taxpayer can expect to generate an overall profit from the current year onward, then it can’t be said that he lacks a profit objective simply because he will never generate an overall profit over the lifetime of the activity.”

This is an extremely important case, and will have long-range ramifications for horse owners as well as ranchers in the livestock industry.

Tax Tips for Horse Business Owners

Posted by on Mar 28, 2014 in News | 0 comments

(used by permission from author)

By Kathleen A. Reagan, Esq.

Congress recognized a long time ago that taxpayers will try to claim federal income tax losses for activities at which the taxpayer has no genuine intent to create profit. The so called Hobby Loss provisions are found at section 183 of the Internal Revenue Code. Horse owners are a prime target of IRS “hobby loss” challenges, reflecting, of course, the fact that it is very difficult to actually make money in horses, yet many engage in the pursuit for the sheer enjoyment of it anyway. Here are seven tips that will make it easier to survive a so called “Hobby Loss” audit.

1. In the planning stages, consult with experts, self educate, and hire professionals in the area of financial acumen and in helping the business to become profitable.

Tax courts are concerned with the steps that the taxpayer took to make the business profitable. So, along with the education about the horses themselves, the taxpayer needs to engage experts in the field of making that particular equine business a profitable one.

Even if the taxpayer hired experts, if they were the kind of experts that advised the taxpayer about what kind of horses were best and how to become proficient at breeding them, and not necessarily how to make money at that business, then the court may not count that. That is, at least one court has ruled against the taxpayer overall, noting that the professionals hired were the same kind that the taxpayer would have hired if she was just engaged in a hobby (e.g. trainers.)
Self education is an important aspect of this; going to seminars, buying books and periodicals, attending shows, and engaging professionals for advice on particular issues, all of which will show a profit motive for the court. Also, get involved in the trade organizations, as this is usually a positive factor mentioned by the court. Using a trade organization to retain an expert that will help demonstrably change behavior in order to generate profits, is one way to help produce the profit motive ruling.
2. Use written business plans and other aspects of commercial behavior.
Business plans are a difficult issue, because horse values are difficult to measure. If a taxpayer produces a business plan that has unrealistic values plugged in, then the court will hold that against the taxpayer. One way out is to use the cash basis of accounting, and then to make major modifications, one or more to the operation, in an effort to make the business profitable. Or, create a business plan, and then work hard on documenting the values involved, with independent appraisals and regular updating of values, and regular efforts to change course in an effort to obtain profits.
A taxpayer can also help himself by engaging in the all of the aspects available for commercial behavior: incorporation, using letterhead, and so forth, that will demonstrate business like behavior.
- Use separate books and accounting.
Keeping good and separate records are an important aspect of business behavior. That is, the commingling of personal funds and business funds lends the appearance of a hobby. Keeping separate books will also help in keeping records of the expectation of appreciation. In any case where the taxpayer has not kept separate records and lost, this is mentioned as a substantial factor influencing the court’s decision. However, the mere keeping of books and a record of expenditures is not enough. The point of keeping books is not the mere recording of financial activity. Many cases have pointed out that the point of the recordkeeping is to allow the taxpayer to cut expenses, and to implement cost savings measures and improve profitability. One thing that will be very important in the record keeping effort, is to keep separate financial records showing the income and expenses associated with each horse, on a horse by horse basis. That is, start a file for that horse and keep the purchase records, sale documents, birth and registration documents, racing or showing and performance records, insurance records and veterinary records in it. The failure to keep such records has been held to show a lack of profit motive.
Documenting the tragedies and setbacks that occur both to the business and to each individual horse will help the court find that there may have been unusual factors that prevented a profit in any one year or for a series of years. So, keep a good record of these “profit busters” and document them fully. That way, if there are explained losses, the Tax court will be more likely to find a profit motive even in the face of sustained losses.
- Running the business: engage in substantial effort and time.
A good rule of thumb here is that the more time the taxpayer devotes, the better. If the taxpayer owns a farm, then the manual labor the owner expends does help show that the taxpayer is doing his best to create a profit. In this context, if the taxpayer has another job from which the taxpayer derives substantial income, which he then uses to offset with horse losses, then that is a factor which weighs heavily against the taxpayer. Conversely, if the taxpayer has no other source of income, then that is a factor which helps the taxpayer.
- Devote substantial resources in terms of adjusted gross income.
Some courts have looked at the percentage of available income the taxpayer is willing to devote to the activity. A taxpayer who devotes roughly over 30% of annual adjusted gross income will likely be seen as having a profit motive, whereas, a commitment of less than 10 percent is usually found to be consistent with a hobby.
- Avoid the appearance of pleasure or recreation.
This goes to the heart of the appearance of “hobby” for a court. That is, if the taxpayer would do this activity anyway regardless of any profit obtained, the court will be much more likely to find that the business is not being engaged in for profit. If the taxpayer or their children do like to ride for recreation, then there is a huge problem if the horses they are riding are the ones utilized in the operation. This can be overcome, but only with diligent attention to the other business attributes available.
- Generate sufficient revenues to offset significant losses.
If there is no income generated or there is a wide disparity of income generated, then the court will have a hard time finding profit motive if this disparity continues for a long time. Though there is a grace period typically during which a start up operation can suffer losses, this start up phase will be abbreviated by the court if the court finds that the taxpayer conducted the very same activity at a loss, and not as a business, in years previous. It is possible to help create a profit year, especially using a cash basis of accounting, if the horses are sold and expenses are taken outside the year in question. Keep in mind that failure to “cull” a herd is also mentioned in several cases as showing a hobby motive and not a business motive. Finally, again, get yourself armed with a good accountant in the equine field. That person can be of material help, and will help with specific details regarding individual taxpayers.

Kathleen A. Reagan, Esq. is an equine attorney practicing in Braintree, MA, available at www.kathleenreaganlaw.com. She has developed a course in equine law at www.concordlawschool.com and is co-founder and vice president of QueryHorse, the largest horse information resource on the Internet.

Think you’re protected by Georgia’s Equine Liability Law? You may not be!

Posted by on Feb 5, 2014 in News | 0 comments

By Christopher C. Chapman, Attorney at Law, www.smithwelchlaw.com, and GHC President

 

Georgia has an Equine Liability statute that offers liability protection relating to equines and equine-related activity, but it is not an absolute shield to liability involving equines.

On the subject of equine liability, most horse owners are aware of the requirement to post a sign with the warning that, “Under Georgia law, an equine activity sponsor or equine professional is not liable for an injury to or a death of a participant in equine activities resulting from the inherent risk of equine activities, pursuant to Chapter 12, Title 4 of the Official Code of Georgia Annotated.” However, most are not aware of the limited protection of the statute. The statute was designed to encourage equine activities and education and would protect most organized activities. In order to understand the statute, one must examine the specific elements of the statute.  The elements include:

  1. Equine activity SPONSOR or equine PROFESSIONAL,
  2. Injury or death to a PARTICIPANT,
  3. IN equine activities.

The horse owner may not be protected from injury or death resulting from an equine-related accident under any other circumstances.In fact, a horse owner that is not an “equine professional” is not protected, unless they are a “sponsor” of an equine activity. In addition, the person who suffers the injury must be a participant in the activity.

Below is a partial list of examples where the liability statute may not offer protection. The list is not intended to provide anything more than examples of possible scenarios:

  1.  A horse escapes from a pasture through a defective, or open, fence, gate, trailer, etc.  The horse then runs out into traffic and is struck by a vehicle. The injured motorist was not participating in an equine event and the owner would not be protected by the statute.
  2. A horse escapes from a pasture through a defective, or open, fence, gate, trailer, etc.  The horse then runs out of the enclosure and runs into or steps on a person, injuring them. The injured person was not participating in an equine event and the owner would not be protected by the statute.
  3. A family member of an equine event participant is bitten, kicked, stepped on while observing the event. The injured person was not participating in an equine event and the owner would not be protected by the statute.
  4. A family member of a student taking riding lessons is injured by equipment, a fall, or other instrument, while a guest on the property or in the barn. The injured person was not participating in an equine event and the owner would not be protected by the statute.
  5. You own horses and you let someone ride one of your horses. The horse bites, kicks, throws or otherwise injures the person. Unless you are an equine professional, you would not be protected by the statute.

It is imperative to know and understand the limits of the liability protection offered under Georgia law. A horse owner should have liability insurance that covers their horses and injuries resulting from their horses’ actions. In addition, if you have a barn, premises liability insurance is a must, and you need to know and understand exactly what is covered by the policy. Finally, it is very important to keep fences, gates and other structures and equipment in good repair.

Wondering how to protect yourself? The Georgia Horse Council’s $1,000,000 excess liability insurance policy covers many scenarios the equine liability law does not.

“It covers your excess personal liability in cases which you may become legally liable to pay as compensation for accidental bodily injury to any person or accidental damage to property or personal injury to any person arising out of the use and/or ownership of a horse or horse-drawn vehicle.”

For more information, please visit georgiahorsecouncil.com/membership.

If you have any specific questions or concerns, then you should contact an attorney with the knowledge of and experience with equines and equine law. The information contained in this article is for general information only and should not be utilized for any other purpose than to allow you to consider the possible risks and to address the issue before it becomes a legal problem.

 

Equine Tax Parity Act Introduced

Posted by on Mar 13, 2013 in News | 0 comments

On March 6, Congressman Andy Barr (R-KY) introduced the Equine Tax Parity Act (H.R. 998), which would make horses eligible for capital gains treatment after 12 months, rather than 24, similar to other business assets.

Under the current federal tax code, gains from sales by individuals of property used in a trade or business, including horses, qualify for long-term capital gains and are subject to the maximum capital gains tax rate of 15% for taxpayers earning less than $450,000 or 20% for those earning more. Since the individual income tax rate can go as high as 39.6%, the lower rate is a real advantage.

Horses held for breeding, racing, showing or draft purposes qualify for the capital gains rates only if they are held for 24 months. All other business assets (except cattle) qualify if held for 12 months.

The Equine Tax Parity Act would end this discriminatory treatment of horses under the tax code and allow horse owners to enjoy the reduced rate upon sale after holding a horse for 12 months. For most owners and breeders shortening the capital gains holding period to 12 months should be a benefit. Reducing the holding period by half would give many horse owners and breeders more flexibility to sell and market their horses. It would mean that every sale of a horse which is held for at least 12 months will qualify as a capital gain or loss unless that horse is held primarily for sale.

 

Fiscal Cliff – Tax Changes Affecting Horse Owners

Posted by on Jan 3, 2013 in News | 0 comments

From the American Horse Council

 

The country went over the “cliff,” but, like a bungee jumper, after a short fall it was pulled back up to the precipice.  Congress’ passage of the American Taxpayer Relief Act of 2012 in 2012 and the President’s signing it in 2013 broke the Congressional impasse and got the country past the Fiscal Cliff for now.  We now sit on the bench next to the sign indicating a “Scenic Overlook.”  But we can relax and enjoy the view for only a few months, until the delay of the across-the-board budget cuts expires and it comes time to raise the U.S. debt limit.

The following is a summary of some of the provisions in the new law that will affect those in the horse industry.  All threshold figures assume that the taxpayer is married and filing a joint return.  A taxpayer filing in a different status changes the thresholds.  The new law:

  • Permanently extends the “middle class tax rates” at 25%, 28%, and 33% for married taxpayers earning less than $450,000 for 2013 and thereafter.  For those families making over that amount, the marginal tax rate increases to 39.6%, a 4% increase.
  • Extends the Section 179 expense deduction at $500,000 with a phase-out dollar-for-dollar once investment reaches $2 million.  It applies retroactively for 2012 and extends through 2013.  This applies to horses and other depreciable property.
  • Extends the current 50% bonus depreciation for qualifying new property,  including horses, purchased and placed in service through 2013.
  • Makes permanent the capital gains and dividends tax rate for married couples with incomes below $450,000 at zero or 15%.  For those with incomes above $450,000 the rate for capital gains and dividends is set permanently at 20%, rather than taxing dividend income at the same rate as ordinary income, now 39.6%.
  • Makes permanent alternative minimum tax relief by increasing the exemption and phase-out amounts to $78,750 for married taxpayers filing jointly, both figures indexed for inflation.
  • Permanently repeals the itemized deduction limitation for married taxpayers making less than $300,000.  For families earning more than that, deductions would still be reduced.  There was a concern that any itemized deduction limitation might adversely affect taxpayers who wager on horseracing, but thanks to industry friends in Congress who realized the unfairness of such a limitation, the new law exempts wagering losses from the overall limitation on itemized deductions.  In other words, wagering losses can still be deducted up to the amount of wagering winnings on a taxpayer’s return.
  • Makes permanent the estate tax exemption at $5 million with a top tax rate of 40%, indexed for inflation.
  • Permanently repeals the Personal Exemption Phase-out for married taxpayers filing jointly making below $300,000.  Continues the phase-out for others.
  • Extends for two years the increased contribution limits and carryforward period for contributions of appreciated real property for conservation purposes.
  • Extends the current Farm Bill through September 30, 2013.

The bill delays for two months the automatic across-the-board budget cuts that were to take effect on January 1, 2013 under “sequestration.”  This means that government agencies will continue to operate at current levels.  This also sets the next Congressional showdown for March, when the sequestration cuts again loom and the U.S. will again reach its debt limit.

As always, taxpayers should check with their personal tax advisors to see how these changes will affect them.  But expect to be back at the overlook bench in 60 days.

 

 

Atlanta Program Provides Equine-based Activities for Wounded Warriers

Posted by on Oct 23, 2012 in News | 0 comments

Fox 5 Atlanta recently did a story on the Calvin Center’s Horses & Warriors program. Read the story and see the video at http://www.myfoxatlanta.com/story/19687480/horse-therapy-aids-veterans.

 

 

For more on the Calvin Center’s program, visit http://www.calvincenter.org/equestrian/horses-for-heroes.php

Future of Gwinnett County horse trails – important meeting

Posted by on Oct 18, 2012 in News | 0 comments

If you’re in Gwinnett County, please attend this meeting:

 

Gwinnett County -
Parks and Recreation – Long Range Plan.

 

Upcoming public meetings for the future of Gwinnett County Parks:

 

Monday, Oct. 22 7:30pm – 9 pm.
George Pierce Park Community Recreation Center,
55 Buford Highway, Suwanee.

 

For questions, contact
Rex Schuder at 770-822-8864 or
Rex.Schuder@gwinnettcounty.com

Gwinnett County Parks & Recreation.

___________________________________________

 

Following info from Debbie Crowe with CTHA:

These meetings are to gather information and desires for their county parks – including those that have horse trails  – (Yellow River, Little Mulberry, Tribble Mill and Harbins).

 

It is crucial that equestrians attend the remaining 2 meetings.

 

We had no idea about the first 2 meetings and wouldn’t have known about the 3rd if Cindy Groom hadn’t noticed a small article in the AJC paper.

 

If you can make either of the last 2 meetings – please -  – attend and take as many of your friends with you as you can gather together.  Wear your horse shirts (CTHA ones would be great) J

 

Here’s what happened at the 10/11 meeting that I attended.

  • 11 equestrians present (only 3 bikers and the rest were “ball parents”) – great showing for us and Thanks!  to those who were able to come with next to no notice.
  • I asked the following questions:
    • Do you have any plans to close any of the existing equestrians trails?  Answer was – we are looking currently only at Yellow River.  Jessie Parker is working to keep informed about the county’s plans for this park and give them input.  So, sounds like the other 3 parks are OK – FOR NOW!!!
    • Are you planning to submit any RTP grant request prior to 11/30 deadline for funding to do maintenance on existing equestrian trails.  Answer was – they would think about it.  I took this to mean no.  What a waste – the $s are there – all they have to do is submit request to ask for some of it.  If you live in Gwinnett County (which I do not), contact your commissioner and tell them to push parks & rec to submit for RTP funds for your equestrian trail maintenance cost.
    • What can we do to form better partnerships for volunteering?  Answer was – contact Kim Shealey directly.  I’ve done that several times.  I am going to plan 2 workdays for 2013 and will let ya’ll the details when available.
  • On the survey they provided, I did not ask for more trails.  No need to ask for something we aren’t going to get.  Ask for continued use of what there is.  Tell them you are willing to volunteer.
  • The “ball parents” were very vocal.  They were very upset about not seeing improvements at their park while new parks were being built that are MUCH nicer than what they have.  Some of the parents were just about hostile.  Not a good way to get what you want.  They really made the equestrians look like the good guys! (which we were anyway)

 

So – those of you that attend these meetings, here are a couple of suggestions:

  • Wear your organization’s shirt – so they know for sure that you are equestrians.
  • Preface any comment or question by confirming that you live in Gwinnett Co. and are an equestrian.
  • Be complimentary on what they are currently providing to us – good, quality equestrian trails.
  • OK for you to ask the same ?s I asked if you want to – it can’t hurt to have them asked numerous times.
  • Come up with your own ?s.
  • BUT – - remember – - be nice!  Make a good impression.  Show the county that you care and are paying attention to what they are doing.  Step up to the plate and offer to volunteer.

 

I can’t tell you enough how important it is that you attend  one of these 2 meetings – especially if you live in Gwinnett Co – and even if you don’t.

Thanks,

Debbie Crowe

 

 

Georgia debuts new State Animal Facility for Emergencies (SAFE) Center

Posted by on Sep 27, 2012 in News | 0 comments

As the only facility of its kind in the nation, Georgia’s new State Animal Facility for Emergencies (SAFE) Center provides shelter to animals during natural & manmade disasters — and it is now ready for occupancy if activated! The 7,800 sq.ft. facility can hold up to 80 cats, 105 dogs and 30 horses, plus a fenced pasture to accommodate other animals. Fort Valley State University was selected for the SAFE location because it is centrally located near interstates and offers an on-site School of Veterinary Medicine.

Ribbon-cutting ceremony at Georgia’s new State Animal Facility for Emergencies.

News clip available: http://www.newscentralga.com/news/local/SAFE-House-Designed-to-Protect-Pets-and-Animals-In-Case-of-Disaster-169568136.html

Monitoring Hay Trends

Posted by on Sep 27, 2012 in News | 0 comments

Although we are just more than halfway through 2012, hay is already in short supply and hay stockpiles are expected to be even scarcer moving into winter. Hay prices are trending upward across the country, not just in one region as in past years, and we can expect them to continue to rise in the coming months. This is especially true across most of the central and eastern United States.

The hay shortage this year is due to several factors, but the most important is the widespread drought conditions. For much of this summer, two-thirds of the United States has been affected by drought and high temperatures. In some states hay fields are under irrigation, but most of the hayland in the country is only watered by rainfall. Without rainfall, hay growth has been reduced severely.

hay

Hay supplies have been limited for several years, with drought conditions occurring in many regions in 2007, 2008, 2010, and 2012. In other words four of the last six years have been drier than normal in many states.

Take Texas for instance, the state that typically produces and exports the most hay. Last year’s severe drought in that state reduced hay production significantly, tripling prices and requiring hay to be trucked in from surrounding states to meet the needs of Texas’ 13 million horses and cattle. Thus, most Texas hay producers went into 2012 with short ¬supplies.

In addition to drought, farmers took many acres of hay out of production during the last two years because prices for crops such as corn and soybeans are at historic highs; farmers can usually make more profit from these crops than hay. As you might have noticed driving through the countryside, many hayfields have been sprayed out or plowed up and crops ¬planted.

With hay stocks down and prices headed up, what should horse owners do? Be proactive and secure hay now for the rest of this year and early next year. If you don’t have storage space for that much hay, then have your hay producer or hay broker hold back enough hay for your needs. This approach might seem extreme, but with supplies tight across the country, I expect many hay producers to “sell out” early. Even if your area has not been severely affected by drought, don’t expect that local hay producers will have hay to sell this winter. With the high prices staying strong and continuing to rise, many local growers will find markets out of state.

Remember to buy hay based on forage quality. With short supplies, a lot of inferior hay will likely sell for high prices this year. Ask for a hay quality test report before buying or have the hay sampled and submit the sample to a certified hay testing lab. Think about ways that you can feed less hay (e.g., by feeding hay alternatives and controlling hay wastage) to stretch out your supplies.

Concentrate feed prices are also rising with the price of grain crops. Corn (an energy component in many concentrate feeds) and soybeans (the main protein source in most concentrate feeds) prices have been at historic highs and they are expected to increase, as well.

In summary, make sure to line up your hay supplies now. Develop feeding systems to reduce wastage. Calculate the ration for each of your horses carefully for both health and economics.

 


Ray Smith, MS, PhD, is a forage extension specialist in the University of Kentucky College of Agriculture’s plant and soil sciences department.

Originally published in the September 2012 issue of The Horse: Your Guide To Equine Health Care.

 

http://cs.thehorse.com/blogs/across-the-fence/archive/2012/09/05/monitoring-hay-trends.aspx

AHP Releases 2012 Equine Industry Survey Results

Posted by on Sep 27, 2012 in News | 0 comments

American Horse Publications conducted its second online nationwide equine industry survey from March 5 through May 20, 2012, and has just made the full results available to the general public.

Sponsors for the 2012 Equine Industry Survey included the Kentucky Equine Research, Merck Animal Health, and Pfizer Animal Health. These companies–and the people behind the companies–are supporters of the horse industry because of their love of the horse, not just because it’s their business.

The objectives of second survey were to gauge participation trends and management practices in the U.S. equine industry, to identify critical issues facing the equine industry as perceived by those who own or manage horses, and to better understand issues pertaining to horse health and nutrition.

The survey was limited to men and women, 18 years of age and older, who currently own or manage at least one horse and live in the United States. This study was anonymous, meaning no one, not even members of the research team, are able to associate survey information with responses.

Upon the conclusion of the survey, 11,320 responses were collected. After removing duplicates, respondents from outside the U.S., and non-horse owners or managers, there were 10,539 usable responses. The results cover the six main sections of the survey: demographics, horse ownership, horsekeeping costs, issues facing the equine industry, horse nutrition, and horse health care.

The survey sample is reasonably representative of the equine industry as a whole based on results from previous surveys. The 45-54 and 55-64 years age groups are most highly represented, with each accounting for 26.2% of the respondents. Overall, 61.2% of respondents are age 45+ and 90.8% of the respondents are female.

The survey focused on horse ownership as well as the ways in which respondents are involved with the horse industry. More than 92% of the respondents indicated that they are horse owners, and 20.9% identified themselves as barn/farm managers. Just fewer than 50% indicated that they ride for pleasure and 34.9% indicated that they ride competitively.

A variety of issues pose challenges to the equine industry in the present and going forward. One objective of the current study was to gain a better understanding of how those who own and/or manage horses perceive the various challenges; to this end, participants were asked to identify the top three issues facing the equine industry.

Nearly 56% of the respondents indicate that the problem of unwanted horses (and what to do with them) is one of the top three issues. The next two concerns were the cost of horsekeeping (47.1%), and overbreeding (37.3%).

Jill Stowe, PhD, provided consultation and data analysis services for data collection and analysis to the AHP. Stowe is an associate professor of Agricultural Economics at the University of Kentucky.

“The equine industry continues to face many challenges,” stated Stowe, “But it appears that the industry is beginning to recover from the great recession of 2008, as indicated by the percentage of respondents participating in the industry, either through owning/managing horses or competing with them, at the same or greater levels than two years ago.”

“We are thrilled with the cooperation of our members and the industry in participating in this survey,” said Christine W. Brune, AHP executive director. “This was an important project for American Horse Publications, and demonstrated that our association can provide vital statistics for the equine industry through the power of the media.”

The complete results of this survey are available at the AHP website under “Resources.” Excerpts from this study must be referenced as 2012 AHP Equine Industry Survey sponsored by Kentucky Equine Research, Merck Animal Health, and Pfizer Animal Health.