Letters to the Editor: On the 140-Mare Cap

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Jocelyn de Moubray | Scoop Dyga

There is no simple answer to the question of whether or not it is in the interests of breeders in the United States to limit the number of mares any stallion can cover. However, we can be certain that none of the relevant arguments should be concerned with questions of free markets. Not even the most dogmatic of believers in the efficiency of free markets would, after a moment's reflection, consider the market for stallion seasons to have the appropriate characteristics.

A free market is one in which no one player, on either the supply or demand side, holds a dominant position, and it is also one in which all the relevant information is available freely to both buyers and sellers. In the stallion market, there are of course players who hold a dominant position and these and others have always resisted attempts to create a more open market where everybody is aware of changes in prices and supply. More often than not, when you sign the contract for a stallion season, you are not entirely sure of either how many mares the stallion in question will cover, nor the exact price paid by other breeders using the same horse. This is not a criticism; it is simply the way markets function without regulation. The players in any market will of course try to maximize their rent or return without considering the interests of all the other participants. For a market to be and to remain free there have to be rules.

Once it became technically and physically possible for stallions to cover successfully anything up to and beyond 200 mares during the spring covering season it was inevitable that many stallion owners would chose to do so. Particularly as almost as immediately it become clear that the demand for seasons to successful and popular stallions is inelastic to both price and supply. The market for stallion seasons is not at all similar to those for ordinary agricultural products, where you expect demand to fall when the price rises and for prices to fall if there is an expansion of supply. We have seen many examples in both the United States and Europe showing that when a stallion is commercially hot, demand for seasons is almost limitless, whatever the price and the number of mares due to be covered.

The market for stallion seasons resembles those for luxury goods. To begin to understand the way it works you have to think about top of the range handbags rather than grain or potatoes.

Once a handbag acquires the status of a symbol, the more expensive it is, the most desirable it becomes and the more often it appears on the shoulders of the right people, the more others want to have it on theirs. The peak satisfaction comes at the moment of purchase, the instant when you join the club of those who have it. The thrill lingers on, but in many cases, it will not be quite so exquisite in the future. For every product, there will probably be a price and a supply which is just too much, but in both cases, experience has taught that it is higher and bigger than anyone would have thought possible viewing through the prism of utility or efficiency.

In the early days, many thought that big stallion books would be a passing phase. Commercial breeders would soon realize that it was not in their interests to pay a lot of money for a season only to go to the sales to compete with anything up to 100 other yearlings by the same sire. This again was a misconception as breeders, as much as those who buy yearlings, are searching for a dream. Most breeders sign the contract avidly, aware of the competition ahead, but confident that their mating will produce one of the best by the sire who will shine in the sales ring and on the track afterwards.

Given the nature of the market, does it make sense to restrict the number of seasons offered to any stallion? After all, few would suggest that Hermes should be allowed to make only a certain number of its most sought after handbags, even if the number any customer is allowed to buy is limited. There are probably two sides to any attempt to answer. The proposed limitation will surely open up the market to a wider range of both horses and people who stand them. Some of the mares covered in the past by the most popular sires will instead be covered by others. The business will not be lost, but will be spread over more sires with different owners. The bloodstock market consistently fails to select the best stallions when they first go to stud. From Tapit, Into Mischief or War Front to Dubawi, Galileo and Siyouni in Europe, the best sires are rarely rated at the top of their generation when they start out on their stud career. For this reason alone, any regulation which forces breeders to try a wider selection of new stallions will probably be beneficial for everybody in the medium run. And then by lowering the barriers to entry and the advantages of the established farms, it will also encourage new stallion owners and farms to enter the business.

The second part of the argument concerns the long or medium term effect of concentrating breeding on an ever smaller selection of elite sires. No genetic test is ever going to resolve this conundrum as nobody knows for sure exactly which physical and mental characteristics allow one horse to run faster than another. In some ways breeding has its own built in adjustments as the future will never be a repeat of the recent past. The success of one super-sire will on its own change the type of mare likely to be successful in the future. As the breed itself is continually changing, and so are the type of sire and mare most likely to succeed.

However, anybody who has worked on matings knows there is already a problem of inbreeding with Thoroughbreds, particularly in Europe, and this is a one which is going to get worse as books of 150+ mares have only become common relatively recently. A look at the Thoroughbreds' past suggests that excessive inbreeding will throw up a few superior individuals, but will also create weaknesses and failures of both physical and mental characteristics. Successful breeders are always thinking about future generations and if the market is pushing in one direction nudging breeders towards prudence and variety will probably help everybody in the medium term.

One possible compromise would be to restrict the number of mares any stallion can cover during its first five seasons at stud, while allowing the handful of sires who are still popular and sought after at this point in their careers to cover more. This way, you could push breeders to try a broader selection of sires, while allowing the owners of those who prove to be the best to maximize their return.

No organization is in a position to contemplate imposing similar restrictions in Europe. If The Jockey Club succeeds in doing so, breeders from all over the world will of course, be following the experiment.

–Jocelyn de Moubray

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