Estimated Profitability of Thoroughbred Yearlings Sold in Auctions in the United States, 2001–2018

Yearling auctions constitute the most common means of trading prospective Thoroughbred racehorses. The main objective of many equine operations is to breed yearlings to sell at these auctions, and therefore, the ability of breeders to consistently realize positive returns is paramount to their long-...

Full description

Saved in:
Bibliographic Details
Published inSustainability Vol. 12; no. 2; p. 463
Main Authors Bryant, Jenna, Stowe, C. Jill
Format Journal Article
LanguageEnglish
Published Basel MDPI AG 01.01.2020
Subjects
Auctions
Breeding of animals
Costs
Economics
Fees & charges
Horses
Investments
Prices
Profitability
Profits
Sales
Sustainability
United States > US
Kentucky
Online AccessGet full text

Cover

More Information
Summary:Yearling auctions constitute the most common means of trading prospective Thoroughbred racehorses. The main objective of many equine operations is to breed yearlings to sell at these auctions, and therefore, the ability of breeders to consistently realize positive returns is paramount to their long-term participation in the market. In this article, we investigate the estimated profitability of Thoroughbred yearlings sold in auctions from 2001–2018. According to our estimates, less than 50% of transactions were profitable, with negative median profit in all years under analysis but two. In addition, the likelihood of realizing a positive return diminishes as the quality of sire decreases. Our results suggest that the long-run sustainability for many breeders, especially breeders that may lack the capital to invest in high quality stallions, is questionable.
ISSN:2071-1050
2071-1050
DOI:10.3390/su12020463