09/08/1994

State Horse Industry Responsible for $1.6 Billion Economic Impact

AUBURN. Ala. - Although Alabama's horse population is relatively small, the equine industry kicks in more than $1.6 billion a year to the state's economy, according to a study by Auburn University rural sociologists.

"However, a major problem for the industry is its fragmentation by horse breed and type of activity, a situation that often inhibits communication and cooperation among large interests," said Joseph Molnar, the professor of rural sociology who directed the Alabama Agricultural Experiment Station study. "It also obscures the industry's overall economic impact."

"A wide variety of horse-related activities are held throughout Alabama each year," said Regina Broadway, a former graduate student who conducted the study with Molnar. "The Birmingham Race Course has the greatest single economic impact, but numerous shows, rodeos, and other events also generate significant spending.

"Demand for a number of commodities and services is directly influenced by horse production and maintenance," she said. "Horse owners must pay for feed, bedding, veterinary services, and health care products. Horse shows and competitions not only create demand for clothing, tack and related items, they also generate a great deal of tourist spending."

"Horse care and maintenance are responsible for the full-time employment of about 1,000 people, and hundreds of temporary jobs are created during major events," Molnar said. "For each job created in the livestock sector, almost two additional jobs are created throughout the economy."

"Most training and breeding facilities are located in rural areas, so many of the direct economic impacts are in communities in need of economic stabilization," Broadway added.

Alabama is home to more than 76,000 race, show, and recreational horses. According to the study, estimated annual care and maintenance expenditures total more than $188 million, which includes an average of $15,390 for each race horse, $11,005 for each show horse and $3,140 for each recreational horse.

Admissions, parimutuel betting, concession receipts and other factors at the Birmingham Race Course had an impact of almost $46 million in 1990, including $1.8 million in revenue to state and local governments. Racing created 900 jobs not directly related to horse care or training, according to the study.

"Horse owners and trainers from other states collected the majority of the purses, but they spent considerable time and money in Alabama doing so," Broadway said. "Of the 300 horses stabled at the race course in 1990, 225 were from out of state. The direct economic impact of out-of-state horses and personnel was more than $1.9 million."

In addition to racing, an estimated 67 saddle clubs sponsor at least 100 open shows a year. Including travel and related tourism expenses, owners of the state's 6,500 show horses spent $9.7 million in 1989, the researchers reported.

Fifty-six rodeos in 35 counties attracted 381,476 people in 1989. These events generated approximately $4.2 million, according to the study.

"The total direct impact of the horse industry in Alabama is estimated to exceed $561 million in employment, business, horsemen's and tourism expenditures," Molnar said.

"In addition, every transaction in the horse industry creates a ripple effect that stimulates demands in sectors indirectly related to the horse industry," he added. "We estimate that every $1 spent in the horse industry generates $2.9 in other sectors. This means that the horse industry's total economic impact is approximately $1.6 billion. Our estimates are conservative."

"Based on the study, we identified several steps necessary for the horse industry to continue growing," Broadway said.

These measures include: (1) establishing a statewide advisory group; (2) constructing a high-quality state show facility; (3) developing a schedule of shows to be held at the Birmingham Race Course between racing seasons; (4) appointing a full-time horse extension specialist; and (5) enhancing collaboration among agricultural universities and state and federal agencies to promote horse activities and address problems in the industry.

-30-

News from:

Office of Ag Communications & Marketing

Auburn University College of Agriculture
Alabama Agricultural Experiment Station
3 Comer Hall, Auburn University
Auburn, AL 36849
334-844-4877 (PHONE) 334-844-5892 (FAX)

Contact Jamie Creamer, 334-844-2783 or jcreamer@auburn.edu
Contact Katie Jackson, 334-844-5886 or smithcl@auburn.edu

September 8, 1994