AI Rears its Head Again

[Zither 0]

http://www.smh.com.au/sport/horseracing/mchugh-takes-gamble-of-his-lifetime-20111110-1n8y8.html

[Zither 0]

McHugh takes gamble of his lifetime Max Presnell

November 11, 2011

On the rails ... Bruce McHugh in his bookmaking heyday. Photo: Fairfax Archive

Not since Don Quixote on his skinny nag, Rocinante, has anybody tilted at windmills like Bruce McHugh.

A most chivalrous knight in the mould of the Man of La Mancha, McHugh has embarked on a quest that cynics maintain will end with his lance splintered into matchsticks and his armour worthless, rusty tin.

''What made Bruce do it?'' said Beryl White who, with husband Geoff, has made a wonderful contribution to racing and thoroughbred breeding, in a chance meeting recently at a Circular Quay coffee stop. She is the epitome of fair play.

Advertisement: Story continues below Few, if any, too, have rivalled McHugh when it comes to the time and money spent on the turf. So, what has turned the usually passive former bastion of bookmaking boldness into a crusader?

''The landmark artificial insemination case is nearing completion [now finished] after a six-week hearing in the Federal Court in Sydney,'' said Peter McGauran, for Thoroughbred Breeders Australia. ''The action was brought by Mr Bruce McHugh, alleging that the rules of the Australian Stud Book and Australian Racing Board were anti-competitive and a restraint of trade. Everything that transpired in the court proceedings convinces us of, first, the necessity for TBA to have joined as a party and, second, that the industry will be irrevocably damaged to the detriment of all but a few if AI is introduced.''

The Beryl White question was put to McHugh.

''About four or five years ago, I was winding down business-wise and wanted to have an interest,'' he said, adding it would be centred on broodmares and stallions at his Tamworth property. However, he didn't fancy the process of human traffic that goes with it, and thus approached local vet Stuart Keller.

''He's got a practice where he stands about a half-dozen horses, not thoroughbreds, throughout the season. He just takes the semen and distributes as need be. So, I approached him, because he's got a lot of local thoroughbred breeders as clients, about whether they would accept AI,'' McHugh said. ''To his surprise, not one had any objection and we came to an arrangement that any stallions I had would be domiciled with him over the breeding season.

''First of all, I had to get the AI ban lifted

[OnTheRise 1]

McHugh takes gamble of his lifetime Max Presnell

November 11, 2011

On the rails ... Bruce McHugh in his bookmaking heyday. Photo: Fairfax Archive

Not since Don Quixote on his skinny nag, Rocinante, has anybody tilted at windmills like Bruce McHugh.

A most chivalrous knight in the mould of the Man of La Mancha, McHugh has embarked on a quest that cynics maintain will end with his lance splintered into matchsticks and his armour worthless, rusty tin.

''What made Bruce do it?'' said Beryl White who, with husband Geoff, has made a wonderful contribution to racing and thoroughbred breeding, in a chance meeting recently at a Circular Quay coffee stop. She is the epitome of fair play.

Advertisement: Story continues below Few, if any, too, have rivalled McHugh when it comes to the time and money spent on the turf. So, what has turned the usually passive former bastion of bookmaking boldness into a crusader?

''The landmark artificial insemination case is nearing completion [now finished] after a six-week hearing in the Federal Court in Sydney,'' said Peter McGauran, for Thoroughbred Breeders Australia. ''The action was brought by Mr Bruce McHugh, alleging that the rules of the Australian Stud Book and Australian Racing Board were anti-competitive and a restraint of trade. Everything that transpired in the court proceedings convinces us of, first, the necessity for TBA to have joined as a party and, second, that the industry will be irrevocably damaged to the detriment of all but a few if AI is introduced.''

The Beryl White question was put to McHugh.

''About four or five years ago, I was winding down business-wise and wanted to have an interest,'' he said, adding it would be centred on broodmares and stallions at his Tamworth property. However, he didn't fancy the process of human traffic that goes with it, and thus approached local vet Stuart Keller.

''He's got a practice where he stands about a half-dozen horses, not thoroughbreds, throughout the season. He just takes the semen and distributes as need be. So, I approached him, because he's got a lot of local thoroughbred breeders as clients, about whether they would accept AI,'' McHugh said. ''To his surprise, not one had any objection and we came to an arrangement that any stallions I had would be domiciled with him over the breeding season.

''First of all, I had to get the AI ban lifted

[Scotchmist 1]

Used in the Dairy Industry for somewhere around the last 50 years.

I wonder how NZ's GDP would look today without AI.

[OnTheRise 1]

Used in the Dairy Industry for somewhere around the last 50 years.

I wonder how NZ's GDP would look today without AI.

we probably wouldn't have any milk LOL

[John Clydesdale 229]

Mr McHugh must have plenty of both as there is zero chance that the racing and breeding world internationally will accept AI, whatever the prospective or perceived merits that could be offered or suggested.

The reason offered by Mr McHugh with regards restraints of various things, matter not one iota to the rest of the world.

Interestingly, the 3YO's running in Australia at the moment could perhaps be regarded as the best in many years. Yet they are the progeny of the EI season where horses were very limited in their transportation movement when their mothers conceived them.

AI, in my view, would breed a larger number of average to bad horses and deminish the gene pool. If we had AI we would not have Zabeel via Sir Tristram and we would the poorer for it, just reflect on what Sir T did for the NZ breed. Add to him Noble Bijou and Mellay and the benefits they have provided NZ over decades would have made the NZ thoroughbred a very different proposition.

AI will never be internationally acceptable in the next 50 years.

[Dopey 214]

Interestingly, the 3YO's running in Australia at the moment could perhaps be regarded as the best in many years. Yet they are the progeny of the EI season where horses were very limited in their transportation movement when their mothers conceived them....

AI, in my view, would breed a larger number of average to bad horses and deminish the gene pool....

AI will never be internationally acceptable in the next 50 years.

Purhaps... they just gave the current 3yold crop some time to develop and didn't push them...given EI.

The rest t of it just sounds like famous last words to me...50 years is a long long time...

By then we will likely be choosing the sex of our foals (for whatever reason) and there will be serious inroads into genetic mapping for racing potential...IMHO

my famous last words.... E I A I Oooo

[OnTheRise 1]

Mr McHugh must have plenty of both as there is zero chance that the racing and breeding world internationally will accept AI, whatever the prospective or perceived merits that could be offered or suggested.

The reason offered by Mr McHugh with regards restraints of various things, matter not one iota to the rest of the world.

Interestingly, the 3YO's running in Australia at the moment could perhaps be regarded as the best in many years. Yet they are the progeny of the EI season where horses were very limited in their transportation movement when their mothers conceived them.

AI, in my view, would breed a larger number of average to bad horses and deminish the gene pool. If we had AI we would not have Zabeel via Sir Tristram and we would the poorer for it, just reflect on what Sir T did for the NZ breed. Add to him Noble Bijou and Mellay and the benefits they have provided NZ over decades would have made the NZ thoroughbred a very different proposition.

AI will never be internationally acceptable in the next 50 years.

You maybe right"

Maybe we need to introduce another E" season and get a few more Black Caviars....I'm not saying it should have been in 30yrs ago Im just saying maybe the last 10yrs, it wouldn't have affected the Cambridge Champs"

[Dennis 0]

The vast majority of people who make money from breeding are big stallion owners.

The vast majority of people who lose money breeding are small mare owners.

Doesn't that tell you why stallion owners will fight tooth and nail to retain the current outdated and anti competitive 'natural' breeding model?

Under AI NZ breeders will be able to access High Chapparal?

How can that not improve our breed, because let's face it the NZ breeding industry is struggling.

[Peter Jenkins 2,120]

The vast majority of people who make money from breeding are big stallion owners.

The vast majority of people who lose money breeding are small mare owners.

Doesn't that tell you why stallion owners will fight tooth and nail to retain the current outdated and anti competitive 'natural' breeding model?

Under AI NZ breeders will be able to access High Chapparal?

How can that not improve our breed, because let's face it the NZ breeding industry is struggling.

Dennis, under A.I. the so-called rich stallion owners will get richer and gain greater control of the market while the smaller studs standing stallions will disappear. The perceived advantages are almost without exception, false.

John Clydesdale is quite correct in his assessment regarding the gene pool. World renowned animal geneticist Gus Cothram is about to release a study showing how the standardbred gene pool has been seriously narrowed after years of artificial insemination resulting in several hundred mares each year being bred to a handful of popular sires. Our breed is in enough trouble already with soundness without going down this track.

If the restraint of trade argument is successful it will also herald the implementation of embryo transfers and frozen semen being used long after stallions have died. Do you really want the premier sale to be made up of the progeny of just 50 mares - 10 foals out of Triassic (all by High Chaparral), 10 foals out of Grand Echezeaux (say 5 by Redoute's Choice and 5 by Fastnet Rock) and 10 Zabeel's from Marquise, and so on. So that shuts out most other breeders chances of selling a yearling at K1 in the top 20. Of course these 50 mares will shove everyone else's yearlings down the pecking order by about 400. So your K1 mare (unless it's a Gr1 winner or producer) has just become a K2. Your K2 mare is now a K3 and well, I think you get the picture. Remember there will be no increase in overall buyer spend just more for the major breeders and less for the smaller operator. There will be no more Patapans, Ekraars and Towkays - how could the smaller studmaster compete with 500 Zabeels and 600 Pins a year ?? Imagine if Sir Patrick had a thousand straws of Sir Tristram in the freezer ? Ouch...

The implications are far greater then a bit of convenience for the broodmare owner.

Anyway NZ should be praying that McHugh wins. The NZ industry would benefit massively once the Asian market (and the rest of the world) closes it's doors to all Australian horses (not just those bred by A.I.). Think very hard about it.

You want to breed to High Chaparral ? If your mare is not worth the the cost of a return trip to Australia then you are most likely overmating her.

[Lloyd Vivian 742]

Dennis, under A.I. the so-called rich stallion owners will get richer and gain greater control of the market while the smaller studs standing stallions will disappear. The perceived advantages are almost without exception, false.

John Clydesdale is quite correct in his assessment regarding the gene pool. World renowned animal geneticist Gus Cothram is about to release a study showing how the standardbred gene pool has been seriously narrowed after years of artificial insemination resulting in several hundred mares each year being bred to a handful of popular sires. Our breed is in enough trouble already with soundness without going down this track.

If the restraint of trade argument is successful it will also herald the implementation of embryo transfers and frozen semen being used long after stallions have died. Do you really want the premier sale to be made up of the progeny of just 50 mares - 10 foals out of Triassic (all by High Chaparral), 10 foals out of Grand Echezeaux (say 5 by Redoute's Choice and 5 by Fastnet Rock) and 10 Zabeel's from Marquise, and so on. So that shuts out most other breeders chances of selling a yearling at K1 in the top 20. Of course these 50 mares will shove everyone else's yearlings down the pecking order by about 400. So your K1 mare (unless it's a Gr1 winner or producer) has just become a K2. Your K2 mare is now a K3 and well, I think you get the picture. Remember there will be no increase in overall buyer spend just more for the major breeders and less for the smaller operator. There will be no more Patapans, Ekraars and Towkays - how could the smaller studmaster compete with 500 Zabeels and 600 Pins a year ?? Imagine if Sir Patrick had a thousand straws of Sir Tristram in the freezer ? Ouch...

The implications are far greater then a bit of convenience for the broodmare owner.

Anyway NZ should be praying that McHugh wins. The NZ industry would benefit massively once the Asian market (and the rest of the world) closes it's doors to all Australian horses (not just those bred by A.I.). Think very hard about it.

You want to breed to High Chaparral ? If your mare is not worth the the cost of a return trip to Australia then you are most likely overmating her.

Peter, with all respect, I think you are scaremongering a little here! We don't see the scenario of multiple foals out of one mare appearing at the standardbred sales - so why would it happen with TB's? Surely AI could be administered with a few simple rules?? For example, if no progeny of a stallion are eligible for registration after the stallion's death other than those conceived during his last season- surely that deals with one of the issues you raise?

I I think it's worth the debate. I believe solutions could be found if there was a will to sort it out.

I just find the whole process of big operators rejecting AI out of hand while supposedly covering enormous books of 200+ mares without any 'help' extremely hypocritical.

[OnTheRise 1]

The vast majority of people who make money from breeding are big stallion owners.

The vast majority of people who lose money breeding are small mare owners.

Doesn't that tell you why stallion owners will fight tooth and nail to retain the current outdated and anti competitive 'natural' breeding model?

Under AI NZ breeders will be able to access High Chapparal?

How can that not improve our breed, because let's face it the NZ breeding industry is struggling.

Thankyou Dennis ...OMG I have been saying this for years...Exactly the STALLION owners are the ones doing all the moaning.... it will save alot of our precious bloodlines for sure, how can that not be g

[OnTheRise 1]

Peter, with all respect, I think you are scaremongering a little here! We don't see the scenario of multiple foals out of one mare appearing at the standardbred sales - so why would it happen with TB's? Surely AI could be administered with a few simple rules?? For example, if no progeny of a stallion are eligible for registration after the stallion's death other than those conceived during his last season- surely that deals with one of the issues you raise?

I I think it's worth the debate. I believe solutions could be found if there was a will to sort it out.

I just find the whole process of big operators rejecting AI out of hand while supposedly covering enormous books of 200+ mares without any 'help' extremely hypocritical.[/

LLoyd, your spot on defending AI, I have been involved in both codes, True in saying I never seen 10 foals from Mainland Banner in a season or any other TOP mare for that matter, Peter Jenkins is so out of touch with how AI works he needs to brush up a bit, maybe its time the small TB studs with less than average stallions need to look closely at the future...we have 1000's not 100's of very ordinary stallions at stud here in Australia...seems to me anyone with a piece of dirt can stand one...what happened to quality...we need some regulations in place, a standard of excellence....Quality..there are also other guidelines that could be put in place if passed all good discussion

[Peter Jenkins 2,120]

Peter, with all respect, I think you are scaremongering a little here! We don't see the scenario of multiple foals out of one mare appearing at the standardbred sales - so why would it happen with TB's? Surely AI could be administered with a few simple rules?? For example, if no progeny of a stallion are eligible for registration after the stallion's death other than those conceived during his last season- surely that deals with one of the issues you raise?

I I think it's worth the debate. I believe solutions could be found if there was a will to sort it out.

I just find the whole process of big operators rejecting AI out of hand while supposedly covering enormous books of 200+ mares without any 'help' extremely hypocritical.

Lloyd, the standardbreds have used embryo transplants just not on any multiple scale but the technology is there to achieve this although it is costly and would only be used on expensive mares. When you consider the most expensive SB yearlings rarely break $100k and yet a number of TB yearlings can make 10 times this amount the extra expense would be justified by many owners of top mares. We would love to breed 10 foals of Miss Finland each year and assuredly would under A.I. Why do you think most of the major conglomerates have NOT spoken out against A.I. ? They would become more powerful and make greater profits and also gain greater control of the industry.

Any attempted restriction on embryo transfers would stand no chance of succeeding should McHugh win his case on the basis of restrictive trade practice - believe me I have expert legal advice on this. It would also open the door to cloning and sex-selection of the foal via separation of x and y chromosome sperm which is technology already available and in use in other codes. Do we really want this many factors out of control in an already fragile breed/industry ?

There is a vast difference between 200 mares being covered and upwards of 600 being covered, the latter figure being what some standardbred sires are currently achieveing in Australasia. Currently we are limited by the stallion's capacity to cover naturally. In 2007-08 the 20 busiest standardbred sires in Australasia covered 5202 mares (41.6%) of the 12,503 mares bred. If the 20 busiest thoroughbred sires in Australia covered 41.6% of the mares bred they would average nearly 500 mares each. Remember this is just Australia. It doesn't take into account potential sales of transported semen to NZ. The consequences of these large books are a reduced gene pool and market degradation.

If the current yearling average of Redoute's Choice is $378,000 for 54 sold the average wouldn't remain at that figure if 400 of them were on the market along with 500 Lonhros and 500 Fastnet Rocks, believe me.

To On The Rise - given that I have spent the past two years researching the A.I. issue from all aspects as an expert witness for the AJC and Aushorse I find your conclusion that I am "so out of touch" rather puzzling.

Your opinion regarding reducing the size of the sire pool is a puzzling and unfounded argument. It's not even one that McHugh tried to use during the case and wisely so. Who forces anyone to use these 'less than average" stallions ? Can you provide valid evidence to support your claim ? Those of us with a few decades experience in this industry will remember that when NZ was at it's strongest, the National Sale featured dozens of NZ-based stallions not just a handful.

I see no comment about the biggest reason to reject A.I. which would be the alienation by all world markets - can you defend that one ?

Any comment on reduced fertility and higher vet costs for broodmare owners under an A.I.-permitted regime ?

[catemar 1]

I would not bother Peter......I have also tried to explain what ramifications a successful court case argued on restraint of trade would have to the thoroughbred AND standardbred industry.

None of this matters anyway, because as I said in another thread, it would take a judge with a death wish to isolate the Australian thoroughbred industry.

[John Clydesdale 229]

Go and have a look at the results of the Premier Sales this year. Look at all the sales, not passes, then look at the stud fees and ALL the associated costs from conception to sales ring, and then do the same for the Select Sale.

You will be surprised at the results.

You will find the BIG and the Small win and lose money on any yearling. Why? Because they are all individual yearlings who attract a certain level of interest and appeal. So yes, some "big" breeders make some good money off big investments and big risks, but equally some smaller breeders make some good money off proportionately smaller risks, but the running costs are the same for both sets of breeders.

Take the RTR results, the top lot was purchased astutely and the reward was fantastic.

What is the nub of this issue is that it is a risk industry, because of the subject matter involved. Doesn't matter whether you are big or small, the level of risk is still the same to all, it is just the dollars as governed by each individual decision that changes and colours the description of "big or small".

So any cliche's used about the big getting bigger at the cost and expense of the smaller is just that, a cliche.

[Lloyd Vivian 742]

John thanks for your response. I take it you think my argument is 'Big Guy bashing.' It's not - and that is the least of my worries: good luck to ALL breeders - you and I both know they need it!

I have just stated that I find the opposition of the breeders whose stallions are covering these monster books of recent times hypocritical; for a stallion to cover 200 mares in a season and achieve 80-90% fertility there is clearly some 'artificial' help going on.

From Sep 1st to Dec 09 is only 100 days. So if there are 200 mares to be covered at least once each the stallion will be serving twice a day from Sep 1st till Dec 9th. In my experience this is not possible on two counts:

1] There are not two mares a day primed and ready for their only serve of the season from Sep 1st.

2] This being the case, sheer logic tells you that somewhere a little bit later on for each mare to be served even once, the number per day will have to increase to three [ or more on the odd occasion] a day.

3] Point 2 being the case, most stallions cannot keep this up for a prolonged length of time - libido and sperm count both drop - along with fertility rates.

So how do you think they manage it John?

[OnTheRise 1]

Lloyd, the standardbreds have used embryo transplants just not on any multiple scale but the technology is there to achieve this although it is costly and would only be used on expensive mares. When you consider the most expensive SB yearlings rarely break $100k and yet a number of TB yearlings can make 10 times this amount the extra expense would be justified by many owners of top mares. We would love to breed 10 foals of Miss Finland each year and assuredly would under A.I. Why do you think most of the major conglomerates have NOT spoken out against A.I. ? They would become more powerful and make greater profits and also gain greater control of the industry.

Any attempted restriction on embryo transfers would stand no chance of succeeding should McHugh win his case on the basis of restrictive trade practice - believe me I have expert legal advice on this. It would also open the door to cloning and sex-selection of the foal via separation of x and y chromosome sperm which is technology already available and in use in other codes. Do we really want this many factors out of control in an already fragile breed/industry ?

There is a vast difference between 200 mares being covered and upwards of 600 being covered, the latter figure being what some standardbred sires are currently achieveing in Australasia. Currently we are limited by the stallion's capacity to cover naturally. In 2007-08 the 20 busiest standardbred sires in Australasia covered 5202 mares (41.6%) of the 12,503 mares bred. If the 20 busiest thoroughbred sires in Australia covered 41.6% of the mares bred they would average nearly 500 mares each. Remember this is just Australia. It doesn't take into account potential sales of transported semen to NZ. The consequences of these large books are a reduced gene pool and market degradation.

If the current yearling average of Redoute's Choice is $378,000 for 54 sold the average wouldn't remain at that figure if 400 of them were on the market along with 500 Lonhros and 500 Fastnet Rocks, believe me.

To On The Rise - given that I have spent the past two years researching the A.I. issue from all aspects as an expert witness for the AJC and Aushorse I find your conclusion that I am "so out of touch" rather puzzling.

Your opinion regarding reducing the size of the sire pool is a puzzling and unfounded argument. It's not even one that McHugh tried to use during the case and wisely so. Who forces anyone to use these 'less than average" stallions ? Can you provide valid evidence to support your claim ? Those of us with a few decades experience in this industry will remember that when NZ was at it's strongest, the National Sale featured dozens of NZ-based stallions not just a handful.

I see no comment about the biggest reason to reject A.I. which would be the alienation by all world markets - can you defend that one ?

Any comment on reduced fertility and higher vet costs for broodmare owners under an A.I.-permitted regime ?

Debating...I had decades too in the..industry, its a lot cheaper to use a vet for AI in a season compared to TB mares I have done both I have paid the costs involved....give me AI any day..plus I save on transporting valuable mares and putting foals at foot at risk, Also below average stallions at stud in OZ don't worry it will take you years to research them...wasn't referring this to McHughs case.

[OnTheRise 1]

John thanks for your response. I take it you think my argument is 'Big Guy bashing.' It's not - and that is the least of my worries: good luck to ALL breeders - you and I both know they need it!

I have just stated that I find the opposition of the breeders whose stallions are covering these monster books of recent times hypocritical] There are not two mares a day primed and ready for their only serve of the season from Sep 1st.

2] This being the case, sheer logic tells you that somewhere a little bit later on for each mare to be served even once, the number per day will have to increase to three [ or more on the odd occasion] a day.

3] Point 2 being the case, most stallions cannot keep this up for a prolonged length of time - libido and sperm count both drop - along with fertility rates.

So how do you think they manage it John?

I have worked on some major farms over the years in both codes....certainly I could spell it out...if anyone reads between the lines here in your post they will realise whats really been happening, I have seen stallions serving up to 4-5 mares in a day to meet bookings just look at the ones with fertility problems, have certainly seen more than a few with libido problems as well...and thats not even mentioning what the mares go through

[Dennis 0]

Go and have a look at the results of the Premier Sales this year. Look at all the sales, not passes, then look at the stud fees and ALL the associated costs from conception to sales ring, and then do the same for the Select Sale.

You will be surprised at the results.

You will find the BIG and the Small win and lose money on any yearling. Why? Because they are all individual yearlings who attract a certain level of interest and appeal. So yes, some "big" breeders make some good money off big investments and big risks, but equally some smaller breeders make some good money off proportionately smaller risks, but the running costs are the same for both sets of breeders.

Take the RTR results, the top lot was purchased astutely and the reward was fantastic.

What is the nub of this issue is that it is a risk industry, because of the subject matter involved. Doesn't matter whether you are big or small, the level of risk is still the same to all, it is just the dollars as governed by each individual decision that changes and colours the description of "big or small".

So any cliche's used about the big getting bigger at the cost and expense of the smaller is just that, a cliche.

C'mon John, you can't tell me a 'town breeder' has the same cost structure for preparing and selling yearlings as a large breeder.

The large breeder uses his own stallion, has his own land and uses his own labour resources.

Yes they take risks and good luck to them.

The townie with a couple of mares pays 'full retail' to have his yearlings prepared, not to mention the original service fee.

The cost structure and ultimate profit (or loss) are entirely different.

The other aspect of breeding I can't get my head around is the concept that most, if not all, of a stallions purchase price is covered by the first 3 years service fees-ie, up to the time the stallions progeny race and therefore judgement can be made as to whether the progeny are actually any good.

So who actually takes the financial punt on a new stallion? The mare owners or the stallion owner?

And of course once a stud finds a succesful stallion then on the back of stallion income it can upgrade it's mares.

Maybe that is simplistic, but that's my take on it. Maybe Peter Jenkins could provide a quick case study on how service fees for a new stallion are set.

I would be most interested.

[John Clydesdale 229]

The nature of costs are the same.

Yes a townie has to pay full retail, but the stud owner has to earn a living as well. He has to meet higher ACC costs than the townie, he has to front the $$$ to buy the stallion in the first instance and.......as we all know, most stallions are unsuccessful on a commercial basis.

So his risk is very high, mortgages to pay and also loans on a non successful stallion can take some time to to repay with very little income from them after year 5.

The preparation costs for yearlings is high, even for the stud o their own horses. Over the decades most studmasters have told me they make very little out of yearling preps, whether for the townie or themselves.

You are right in that the mare owner takes some risk on new stallions, but that is part of the decision to support a new stallion. You weigh up the risk against what you can get as a return.

That is my point about about risk!

Do the exercise on the yearling returns, you may be surprised at the results you see.

[Dennis 0]

Yes I have done the sums on yearling preps, pinhooking and the like and agree there is no easy money to be made. Especially with the industry in it's current state in NZ.

However I remain sceptical that everyone in breeding operates from a level playing field.

As mentioned my concern lies around the stallion service fee model and what appears to me an offloading of a lot of stallion risk to the broodmare owner.

There are studs in NZ who have a history of selecting dud or mediocre stallions but still remain in business.

How does that work?

[Peter Jenkins 2,120]

Dennis, much like many other businesses service fees are set by the stallion owner or studmaster by

a) determining how many mares he believes his stallion can cover

trying to recover (as you have pointed out) their capital outlay within 3 years

c) how much appeal the stallion holds in the eyes of broodmare owners.

The fee will be set with these 3 factors in key consideration.

The same principal applies to someone building a hotel and then seeking to recover their outlay by what the charge per room. Or building an investment property and doing the same with rental income. There are considerable risks involved in standing stallions and not all can be covered by insurance and although many can the cost of this is excessive.

I know of a number of stallions who never came close to recovering their purchase price. Not everyone is blessed with sound judgement and foresight - even stallion owners.

Enough duds and even the best farms are open to failure. Norm Hawthorne - bless his memory - was a legendary horseman and has stood a number of successful stallions at his Paramount property in the Hawke's Bay but 3 failure stallions - Half Iced, Dedicated Rullah and Light Spirits - brought his operation to ruin. They were well patronised too on the back of successful sires In The Purple and Diplomatic Agent.

I am not sure about what is happening at ground level in NZ right now but fee discounting is rife here in Australia. The advantage is firmly with the broodmare owner at present. Some broodmare owners may wish to question however why a stud will let them into a stallion at 1/3rd or 1/4 of the advertised fee.