Michigan State University Extension
Ag Experiment Station Special Reports - SR489201
07/28/98
Monitoring the Michigan horse industry is a difficult and challenging task. Surveys were conducted in 1971, 1984 and 1991, each using different sampling techniques. Trends appear evident and warrant discussion.
In 1991 the Michigan Equine Monitoring Systems (MEMS) began functioning. MEMS is conducted by the Michigan Department of Agriculture (MDA) in cooperation with the United States Department of Agriculture (USDA), Michigan Agriculture Statistics Service (MASS) and Michigan State University. It promises to be the first comprehensive system for evaluating the Michigan horse industry from both a health and an economic perspective. Preliminary results of the initial MEMS survey have been compiled and published and are the basis for this discussion.
The total Michigan horse population on June 1, 1991 was estimated to be 130,000 head of total equine. Figure 1 compares the results of the three surveys. (NOTE: Figure 1 is a graphic and does not translate into database format, please refer to the original to view the figure) Most evident is the apparent decline in pony numbers, also observed by producers statewide. Horse and mule numbers remained relatively constant over the last 20 years. During this time the Michigan economy has experienced significant setbacks, yet horse numbers, which make up the largest percentage of total equine numbers, have remained relatively constant.
Declining pony numbers have resulted from a decrease in the popularity of the pony as a first mount for youth. While 4-H projects involving equine (9,767 in 1991) consistently outnumber all other animal projects, it is generally considered more fashionable for youth to own a horse rather than a pony. Major pony breeders have done little to change this trend. The emphasis has been on producing nationally competitive show ponies rather than youth mounts.
In 1991 the top ten counties in total equine were: 1) Oakland, 2) Washtenaw, 3) Livingston, 4) Jackson, 5) Kent, 6) Lapeer, 7) Kalamazoo, 8) Ingham, 9) Wayne, and 10) Allegan.
This is not appreciably different from the results of previous surveys indicating the proximity of equine to areas with large human populations. Unlike any other agricultural commodity, the equine industry is a true marriage of urban and rural interests benefiting the people of Michigan both socially and economically.
Table 1. Equine by Major Use
Major Use 1984 1991 Change % Change Breeding 25,000 19,000 -6,000 -24 Flat Racing 5,500 6,000 +500 +9 Harness Racing 12,000 10,000 -2,000 -17 Pleasure 83,500 *68,500 -15,000 -36 Showing 28,500 18,000 -10,500 -36 Work 5,500 8,500 +3,000 +54 TOTAL 160,000 130,000 -30,000 -19
*Combines pleasure, trail riding, and other use categories of 1991 MEMS survey.
Table 1 shows survey results from 1984 and 1991 regarding the use of Michigan equine. Substantial increases in horses used for work and flat racing are comparable to a decline in most of the major use categories. The number of horses used for pleasure has suffered the largest reduction. The relatively constant decline in pony numbers since 1971, and the decline in pleasure horse numbers, seem to be supported by observations by industry personnel.
The decline in pleasure horse numbers might best be explained by the Michigan economy over this same time period. As disposable income is reduced, people limit their entertainment activities. Owning pleasure horses does not differ appreciably from similar activities such as snowmobiling, skiing or boating. These types of activities are important for the psychological and economic well-being of the people of Michigan.
Table 2. June 1991 Inventory and 1990 Income and Expenses by Operation Type
Operation Type June 1, 1991 1990 1990
Inventory Income Expenses
Boarding stables 12,000 $12,000,000 $17,000,000
Breeding farms 23,000 22,000,000 49,000,000
Other farms 30,000 7,000,000 23,000,000
Riding stables 3,000 4,000,000 4,000,000
Private residences 45,000 11,000,000 61,000,000
Training stables 11,000 26,000,000 39,000,000
Other equine 6,000 6,000,000 5,000,000
operations
Owners with all N/A 34,000,000 58,000,000
equine boarded elsewhere
TOTAL 130,000 $122,000,000 $256,000,000
The 1990 income and expenses of various horse enterprises are shown in Table 2. Total expenditures by equine owners topped one-quarter billion dollars in 1990. This repre- sents a substantial contribution to the Michigan economy. These monies represent jobs and purchases which involve a large number of persons not directly involved in the equine industry. Horse owners travel great distances to participate in horse events. This requires purchases of food at restaurants, fuel for vehicles and lodging for overnight travel. The maintenance of show grounds and racetracks also requires a large amount of non-horse- related labor.
The size of horse operations in 1991 is graphically depicted in Figure 2. Operations of less than 9 total head account for 78,000 head of equine. This is indicative of the part-time nature of the industry and the large number of Michigan residents who own equine. The greatest number maintain only a few horses to enjoy on weekends and holidays. The enormous benefit to young people through 4-H and breed association youth programs also requires minimal horse investment. These types of activities account for the relatively small size of most horse enterprises.
The Michigan equine industry has remained strong despite the economic difficulties Michigan has experienced over the last decade. However, it is time to stop looking at the Michigan equine industry as an economic barometer and instead turn to it as an economic stimulant. The opportunities for growth in equine-related enterprises are enormous and should be fostered by state agencies.
Michigan Racing Industry
Because of the unique nature of the race industry, a separate and detailed discussion of its importance to the Michigan economy is warranted.
Horse racing's payoff to Michigan is far greater than the dollars wagered at racetracks. Horse racing means tax dollars; horse racing means jobs; horse racing means investments; and horse racing means stability and increasing prosperity for our state's farms.
Parimutuel horse racing produced over $21 million in direct revenue for the state of Michigan in 1990. This revenue supported all racing regulatory programs and many other programs within the Michigan Department of Agriculture. Several million dollars supported the county fairs and their programs across the state. The state appropriated over $3.6 million to the local communities in which tracks are located to defray the costs of police and fire protection. Financial incentives were offered to the breeders of the best Michigan-bred horses. Annually, $800,000 has been provided to supplement the budget for the Pontiac Silverdome. The remaining monies went to the State General Fund to be used in human services, education, transportation and other vital programs.
As an important part of the state economy, horse racing interests pay property taxes on the tracks, breeding, and training facilities to local communities. The tracks also contribute to the economy of the surrounding communities by purchasing goods and services. For example, the tracks spent over $2.3 million on advertising in 1990. Successful bettors, who pay state income taxes on their winnings, won over $352.9 million in 1990. The tracks paid out more than $32.8 million in purses to winning owners. In addition, the racetracks paid more than $19.5 million in salaries and wages, providing employment as well as income and payroll taxes to the state.
Horse racing is the most labor-intensive activity found in Michigan agriculture. It creates numerous jobs on and off tracks for trainers, drivers, jockeys, blacksmiths, grooms, veterinarians, racing officials, parimutuel clerks, guards, admission clerks, concession workers, restaurant workers, vendors, office workers, and numerous other personnel. Indirectly, racing interest provides employment for farmers, transportation workers, restaurant and hotel personnel employed near the tracks, the media representatives who report on racing, and the workers who build and repair the training or track facilities, among others. Their collective contribution to the Michigan economy is substantial.
In many of the rural areas of our state, supplying the needs of racehorses represents much of the local economy. Farmers grow and sell the feed required by our racehorse population. The elevator operations make sure that feed is available year-round. Farmers open their barns and training facilities to horse owners on a year-round basis, supplying needed employment opportunities for Michigan citizens.
1984 was the first year that an equine census was conducted and gave a breakdown by breed and use. Racehorses comprised 11 percent of the 160,000 horses in Michigan. In 1991, even though horse numbers decreased to 130,000, the percentage of racehorses increased to 12.3 percent.
Despite increases in the number of days raced and the total wagering, the state revenues decreased by 26 percent (Table 3). This is a negative trend because the state has fewer dollars to distribute directly or indirectly back into the racing industry. If more money is not invested in the industry in the form of purses, sire states and breeders' awards, there could be a significant decline in numbers of racehorses in the future.
Table 3. Michigan Racing
Total Total
Year Days Total Parimutuel State
Raced Attendance Wagering Revenue
1980 703 3,030,257 $396,396,317 $27,828,645
1990 906 2,660,443 $440,889,684 $20,712,184
Future of the Michigan Horse Industry
It appears that the Michigan horse population will remain relatively constant in the future. Numbers will fluctuate between 120,0900 and 180,000 head. Factors which will affect horse numbers are the Michigan economy and human population. Horse numbers will continue to be concentrated in the urban and suburban Michigan counties. Rural counties will continue to have relatively smaller horse populations. In this manner the horse industry represents the true interface between animal agriculture and urban Michigan. It plays an important role relative to environmental and animal welfare concerns of Michigan citizens.
The opportunity for economic growth in the horse industry does not necessarily dictate large increases in horse numbers. State and association programs which increase the use of horses to improve the quality of life for Michigan citizens mean increased jobs and revenue for a variety of Michigan businesses.
The construction of the statewide Agricultural and Livestock Education Center at Michigan State University as part of the Animal Initiative will provide many economic and educational dividends for the Michigan horse industry. The center will provide facilities for classroom instruction of MSU students as well as educational programs to better meet the needs of horse breeders. The center will also provide jobs and revenues for Michigan residents by competitively bidding for national horse events which require educational facilities of this type.
The future of the Michigan race industry is linked to the future of other forms of gambling presently being introduced in Michigan. Off-track betting, casino gambling and lotteries all could reduce the future potential of the Michigan race industry. Legislative provisions which require financial support for racing from all state gambling revenues will help to insure the continued prosperity of this important Michigan industry.
Technologies Implementation
Reducing the costs of production in the labor-intensive horse industry requires the development and implementation of new technologies. The processes of semen collection and handling techniques which allow for shipment of viable semen need to be further developed and implemented. This will allow the availability of high-quality genetics to a larger number of horse owners, thus reducing the cost of production and improving the overall quality of Michigan horses.
Expanded efforts in the areas of exercise physiology and lameness detection and prevention will benefit both the racehorse and other performance horse (jumping, reining, cutting, etc.) industries. Research is needed to discover the optimal training and conditioning regimens which both maximize performance ability and insure animal safety and well-being. Instructional programs which make these technologies available must be expanded to better serve the Michigan horse industry.
The Michigan horse industry can be further strengthened by expanding the coalitions formed among horse organizations to increase marketing opportunities and the promotion of horse-related events. Assistance is needed in the development of marketing strategies for horses and horse products. Events which are based on sound business practices will insure a continued demand for these commodities.
The continued development of MEMS and the practical implementation of its data to solve horse industry problems is critical to the future of the Michigan horse industry. Economic data will assist in reducing costs of production. Health data will be used to insure optimal care and disease prevention for Michigan horses. Population data will be useful in predicting future trends in the Michigan horse industry. MEMS is a pioneer program and will identify a variety of horse industry concerns and benefits and assist in the recognition of future research needs.
The interest in educational horse programs at MSU and adult horse programs statewide continues to grow. Expanded horse offerings for undergraduate students at MSU as well as through the University Outreach programs are needed to better serve the needs of Michigan citizens.
Emerging Issues or Concerns
The horse industry will continue to take a leadership role in dealing with the concerns of average Michigan citizens regarding animal agriculture. Because most horse facilities are located near population centers, horse owners are exposed to more potentially volatile situations than are most food animal producers. The horse industry has a history of taking the initiative when dealing with "right to farm" and animal welfare issues. The horse industry provides a positive impression of animal agriculture in Michigan and is very supportive of agricultural programs and legislation.
Horse manure management poses unique concerns and will require a unique solution. With other production species, pollution and contamination are of greatest concern in manure management. In horse operations, the greatest concern is dealing with the high fiber content and sheer quantity of manure and bedding. Research is needed to provide solutions which are both environmentally responsible and economically sound.
The horse industry has been and will continue to be an integral part of the Michigan economy. With continued and expanded support, its growth will provide additional jobs and revenue and improve the quality of life for the citizens of Michigan into the 21st century and beyond.