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The business of horse breeding in Spain – Finance and horses

Horse breeding and the entire industry that surrounds it is growing rapidly in the world. The countries that are at the top of this activity are France, Germany, Italy and the United States. Spain wants a place on the podium of the countries of the equestrian business and horse breeding. That is why today we will talk about the horse breeding business in Spain and what its prospects are.

Spain has begun to stand out as one of the places for equestrian business. This is due to its long equestrian tradition in conjunction with an institutional scaffolding to boost the activity. In addition, Spain has its own breed of horses, the PRE (Purebred Spanish), also known as Andalusian Horse.

The global growth of equestrian sports and its economic impact has put it in the spotlight of the public and private sectors.

While it is still a strictly private sector business, the public sector is getting involved. It is a sector that needs considerable investment and expenditure but has begun to have a significant impact on GDP and tax collection. For this reason, the Spanish government has set to work to stimulate the economic activities associated with hipism.

Without a doubt, Spain has an incredible potential to grow its equestrian sector and contribute more to the economy. But let’s know a little about the numbers of the equestrian sector.

Arrayán and Álvarez Moya – The business of horse breeding in Spain

The numbers of the horse breeding business sector

We already know that the equestrian sector is growing, but how much money are we talking about? The most accepted estimates speak of the equestrian sector moving approximately 300 billion dollars a year.

In addition to this, it has a very important employment generation potential for horse caretakers, trainers, riders, cleaners, etc. All the activity shows a potential to generate 1.6 million jobs around the world.

It is an industry that only in its direct activities generates approximately 2/3 of its economic activity. This means that in addition 1/3 of its activity has a positive impact on other sectors such as transport and health.

It is undoubtedly a sector that can take on greater relevance and Spain has an important margin for growth. It is a great opportunity to venture into the horse breeding business in Spain. But first we must know a little more about the sector.

How is income generated by horse breeding?

Generating income for horse breeders is not as easy as you think. When breeding horses, we can get a winner between 10 or 20 horses. The buying and selling of horses may not be the main income of a horse breeder.

Investing in horses can carry great risks due to the high costs of maintaining a stud.

However, there are associated businesses that can help sustain the business in the short term and also become an important source of income and profits.

Whether you are interested in the subject out of mere curiosity, or if you are interested in undertaking in this sector, we will give you an idea of what are the sources of income that a professional horse breeder can develop.

Below, we mention the different sources of income that horse breeders can access.

Traditional sources of income for the horse breeding business in Spain.

  • Buying and selling normal horses: Buying and selling horses is a natural source of income for horse breeders. But to get a good reputation we must demonstrate the potential of our horses. Hence the birth of competitions and horse racing. To be able to demonstrate the potential of our stud farm.
  • Equestrian competitions and horse racing: Whether we decide to demonstrate power or excellent training, competitions can result in an interesting income, but they also grow the reputation of the horse breeder. Therefore, the best horses of the breeder are made to participate in competitions. Keeping the breeder’s reputation high is essential to maintain prices that make the business sustainable.
  • Sale of stallions: The best competition horses can be sold for extraordinary amounts of money. A winning horse becomes a stallion and only for that reason it is already a money generator, but we will see it later. These horses, having the potential to generate income, become coveted and if liquidity is needed, they can be sold. However, a good stallion is better business keeping it than delivering it as we will see below.

A winning stallion, the jewel in the crown.

One of the most coveted dreams for a horse breeder is to breed a stallion that wins important equestrian competitions. This gives the breeder access to charge for mating the stallion.

If you get a competition-winning stallion, you have a gem. And it is that a stallion is able to charge for each “covered mare” or what is the same for each mating session.

The amount they charge for it depends on how important the horse’s victories are. We have the example of Tapit, a stallion from the United States, who charges $300,000 for each session.

A stallion can mate approximately 135 times a year (every other day approximately). This guarantees huge income for the stud farm and ensures the future of its business.

It is estimated that thanks to this Tapit is valued at 120 million dollars. In a year Tapit can generate 40 million dollars. However, there is always the need for liquidity for the business and the health and age risk of the stallion. Considering this, the breeder must decide if he needs the money immediately or prefers a long-term income, taking into account the risks.

 

Other sources of income for the horse breeding business in Spain.

  • Recreational riding or training: Some breeders combine business with recreational riding or equestrian training. Whether it is high-level training or the teaching of horse riding, this business can be very interesting to use horses with less potential and take advantage of them. Academies are an excellent opportunity for breeders and can also help you sell horses of lesser draft for the learning of new riders.
  • Equestrian tourism: One of the sources of income that some horse breeders neglect is equestrian tourism. Equestrian routes have been developing in Spain for some years. If the location of the horse breeder is combined with beautiful rural landscapes, the breeder has a great opportunity. Again it is the opportunity to make productive those horses well trained but whose physique does not favor him in competitions.

It is certainly important to shield the horse breeding business from growing interest and competition. In the coming years their profitability will be reduced and with it the true breeders must be resilient in the face of adversity. We must prepare ourselves to make the horse breeding business flourish in Spain.

La entrada The business of horse breeding in Spain – Finance and horses se publicó primero en Gustavo Mirabal Castro.

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