The biggest challenge of the study was to determine the state’s horse population. (Credit: Deborah Davis)
A new study reports that the horse-industry impact exceeds $2 billion.
Despite back-to-back economic blows over the past decade, Alabama’s horse industry continues to have a substantial impact on the state’s bottom line.
A recent economic analysis by Auburn University economists indicates horses pump an estimated $2.08 billion annually into Alabama’s economy, contributing, both directly and indirectly, to about 24,000 jobs representing $706 million in total labor income.
Auburn agricultural economics graduate research assistant Darcey Richburg – working under the guidance of agricultural economics professors Patricia Duffy and Deacue Fields, and equine science associate professor Betsy Wagner – invested two years in the study. It included conducting surveys, compiling data, crunching numbers and printing mountains of spreadsheets.
Richburg, a 2013 Auburn animal sciences alumna, will receive her Master of Science degree in agricultural economics in December.
Richburg and her advisers designed the project to determine the economic impact of Alabama’s horse business in the wake of both a 2005 change in federal horse slaughter laws and the deep recession of 2008. The slaughter ban cost the U.S. horse industry an estimated $65 million in horse meat exports in 2006.
"Nationally, the slaughter ban and the recession resulted in large declines in the number of foals registered in major breed registries," Wagner said. "We knew the national numbers have been slowly rebounding, but we didn’t have a sense of what was happening in Alabama until we could do our own economic impact study."
Another project goal was to develop a set of budgets for horse owners based on low, moderate and high levels of care.
"No two horse owners spend the same amount of money on their horses, but for someone who’s thinking about buying a horse, the budgets we developed can at least give them an idea of what horse care and equipment cost, and help them figure out if they can afford to get into the business," Richburg said.
The biggest challenge of the study was determining the state’s horse population, Richburg said.
"You have two categories of horses – farm horses and those used for recreational and companion purposes," Richburg said. "USDA’s Census of Agriculture was our source for the state’s farm horse population, but it didn’t take into account the larger category of companion animals."
To calculate that number, Richburg relied on a national pet demographics survey the American Veterinary Medical Association conducted in 2012 and by extrapolation pegged Alabama’s total farm and companion horse and pony population at just under 154,000.
The new analysis, based on 2015 data, comes 10 years after a similar economic impact study of the state’s horse industry that determined horses were a $2.4 billion industry in Alabama. But Duffy cautioned against comparing that study’s results to the more recent analysis for two basic reasons.
"For one thing, the 2005 study indicated the state had roughly 187,000 horses at that time, or about 33,000 more than today," she said. "Also, the economic impact assessment software available today is more sophisticated than what could be used then."
Wagner, Alabama Horse Council president, said the latest analysis provides the horse industry another much-needed statistic.
"This information also gives us a much better estimate of the number of jobs in the state associated with the horse industry," she said. "When you consider feed store employees, facility managers, equipment sales reps, marketing professionals, hay and grain producers, and others who supply products or services to horse owners, you see the impact the industry has on people’s economic well-being and on Alabama’s overall economic health."
The study was supported in part by the Alabama Horse Council.
Richburg’s complete thesis, "An economic impact study of the Alabama horse industry," is available at http://etd.auburn.edu/handle/10415/5408.
Jamie Creamer is a specialist 3 in the Comm & Marketing department of Auburn University.