MRLS racks up $336 million in losses

MRLS racks up $336 million in losses

Dec 01, 2001
By staff

Louisville, Ky.-A third of a billion dollars is the price tag on the Mare Reproductive Loss Syndrome (MRLS), which wreaked havoc on the Kentucky horse industry last spring, according to a recently published economic report.

The study, commissioned by Kentucky Governor Paul Patton and conducted by the University of Louisville's Department of Equine Business, projects that 30 percent of the anticipated 2002 Thoroughbred foal crop in Kentucky is lost due to the syndrome. Economic impact to the state from losses that affected all horse breeds is in the $336 million ballpark for the years 2000 to 2003.

"We had already heard reports based on some preliminary investigation by the University of Kentucky that the impact was on the order of magnitude of 20 to 30 percent for the Thoroughbred horses," says Dr. Richard Thalheimer, University of Louisville professor and lead investigator of the study.

"The percentage was very high, but we were not surprised. It confirmed our understanding that the impact was very large."

More than 1,000 breeders and farm operations participated in the survey, which tracked six breeds of horses (accounting for 96 percent of registered foals in Kentucky). Response rate was 28.1 percent. Thoroughbred breeders faced the heaviest economic losses, accounting for $300.5 million of the total, or 89 percent.

Financial breakdown

Each lost Thoroughbred foal is figured to have an economic impact of $85,142. The estimate includes a portion of the mare cost, the stud fee, weanling cost, and yearling cost. Losses were spread out over four years, from 2000, when this year's foals were conceived, to 2003, when next year's foals will be sold as yearlings.

The study indicates losses of $15.2 million in 2000, $109.4 million in 2001, $124.8 million in 2002, and $51.1 million in 2003.

Domino effect

Besides the obvious - horse breeders, stallion owners, horse farm operations, and farriers -veterinarians are among those affected by the loss in the long run.

Economic loss to veterinarians over the 2000-2003 period is estimated to be $16.9 million. Also there is an estimated increase to veterinarians due to added costs in mare and foal treatment in 2001 of $1.7 million.

Dr. Thomas Riddle, of Rood and Riddle Equine Hospital in Lexington, Ky., says the dollar figures reported in the study did not surprise him.

"Certainly there's going to be an effect," he says. "There are some farms that may not survive Mare Reproductive Loss Syndrome. There are farms that are going to have to cut back on the amount of work that veterinarians do, because they simply can't afford it."

He advises against such measures for a prolonged period because "they need to continue to provide complete services to their animals, or otherwise they end up losing more money."

Thalheimer says of veterinary losses, "To the extent that veterinarians will lose foals that they would've cared for, that will have a negative effect on the income they would've received."

"On the other hand, there is an increase in income to veterinarians in 2001 because of the increased cost of treating these mares."

Riddle suspects his practice will ride out the MRLS storm.

"In my practice there is not great concern," he says. "We feel that we have enough depth. That will certainly make a small impact on the practice but our practice has grown every year since we've been in operation and we expect that to probably level out in the next year, but we'll manage."

Down the road

The study suggested that MRLS could have an economic impact for several years to come.

"Additional losses may also occur as a result of the scare over MRLS," the study reads, "which could result in a reduction of mares sent to Kentucky in 2002 or in lower values for mares bred in 2001. Should MRLS recur in 2002, i.e., not be a one-time event, the losses could be much more dramatic over a longer period of time."

In related news

The millions of dollars that Kentucky's horse industry lost to this syndrome prompted Congress to act. A farm aid bill (H.R. 2646) has already passed the House and is working its way through the Senate, at presstime. A portion of the monies will assist people affected by foal loss. The bill also designates the horse as livestock.

The economic impact study of MRLS was used to address the legislature.