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Federal Issues Affecting the U.S. Horse Industry



Posted June 7, 2002

Editor’s Note:
We begin this series of articles with the results of The National Economic Impact Study of the Horse Industry commissioned by the American Horse Council in 1996. While portions of this study have previously been published, we felt it best to present this more complete story on the study. Bear in mind that the study is now six years old and there is little doubt that these numbers have increased appreciably. Hopefully, a new study will be conducted in the not too distant future to bring these numbers up to date. The study also lists the economic impact of the horse industry on 11 individual states and information on specific other states was not available in the material. In the coming weeks, we will be presenting a series of articles about the issues affecting the horse industry as well as information about how individuals can contact their elected representatives in Washington.

The horse industry is a very large and important part of our national, state and local economies. It is diverse, involving agriculture, business, sport, gaming, entertainment and recreation.

An economic study done by the American Horse Council Foundation validates what the industry has known for some time, that the horse industry is a highly diverse, national, serious and economically significant industry that deserves the attention of government, the media and the general public.

Highlights of the study include:
•There are 6.9 million horses in the United States.
•7.1 million Americans are involved in the industry as horse owners, service providers, employees and volunteers. Tens of millions more participate as spectators.
•1.9 million people own horses.
•The horse industry directly produces goods and services valued at $25.3 billion annually.
•The industry has a $112.1 billion impact on the U.S. economy when the multiplier effect of spending by industry suppliers and employees is taken into account. Including off-site spending of spectators would result in an even higher figure.
•The industry directly provides 338,500 full-time equivalent(FTE) jobs.
•Spending by suppliers and employees generates additional jobs for a total employment impact of 1.4 million FTE jobs.
•The horse industry pays $1.9 billion in taxes to all levels of government.
•The median income of horse-owning families is around $60,000. Horse ownership is broad - with 38% of owners earning under $50,000 and 21% over $100,000.

Numbers of Horses
The study concludes that there are 6.9 million horses in the U.S., including both commercial and recreational horses.
Specifically, the number of horses by activity is: Racing - 725,000
Showing - 1,974,000
Recreation - 2,970,000
Other - 1,262,000
Total - 6,931,000
“Other” activities include farm and ranch work, rodeo, polo, police work, etc.

Participation
7.1 million people are involved in the horse industry in some way, either as owners, employees, service providers or volunteers. That means that 1 out of every 35 Americans is involved with horses.
Specifically, the participation is broken down for each activity as follows: Racing - 941,000
Showing - 3,607,900
Recreation - 4,346,100
Other - 1,607,500
Total - 7,062,500
There is some overlap of individuals who participate in both showing and recreational activities.

The Size and Impact of the Industry
Gross Domestic Product
The study documents the economic impact of the industry in terms of jobs and contribution to the Gross Domestic Product(GDP).
The study’s results show that the industry directly produces goods and services of $25.3 billion and has a total impact of $112.1 billion on U.S. GDP. It is strong in each activity with racing, showing ad recreation each contributing more than 25 percent to the total value of goods and services produced by the industry.
Specifically, the GDP effect for each (in billions of dollars) Is:
Racing - Direct-7.383 - Total-34.03
Showing - Direct-7.390 - Total-34.802
Recreation - Direct-6.725 - Total-28.30
Other - Direct-3.725 - Total-14.922
Total - Direct-25.295 - Total-112.058

The horse industry’s contribution to the U.S. GDP is greater than the motion picture services, railroad transportation, furniture and fixtures manufacturing and tobacco product manufacturing industries.

Employment
The industry employs 619,400 people directly. Some are part-time employees and some are seasonal so this equates to 338,500 full-time equivalent jobs.
The industry generates over 1.4 million FTE jobs across the U.S. as follows:
Racing - 136,400 - 472,800
Showing - 105,000 - 441,000
Recreation - 56,400 - 316,900
Other - 40,600 - 173,800
Total - 338,500 - 1,404,000

The horse industry directly employs more people than railroads, radio and television broadcasting, petroleum and coal products manufacturing and tobacco product manufacturing.

Taxes
The industry pays a total of $1.9 billion in taxes to federal, state and local governments as follows (in millions of dollars):
Federal - 710
State - 470
Local - 720

The Diversity of the Industry
The results of the study show that the horse business is a highly diverse industry that supports a wide variety of activities in all regions of the country. It combines the primarily rural activities of breeding, training, maintaining and riding horses with the more urban activities of operating racetracks, off-track betting parlors, horse shows and public sales.

Urban versus Rural
The study concludes that the horse industry has a direct economic effect in urban areas of $2.8 billion and employs 45,800 FTE employees and a direct economic effect in rural areas of $22.5 billion and employs 292,700 FTE employees.

Income Levels
The study dispels the misperception that the horse industry is an activity only for wealthy individuals. In fact, the horse industry is a diverse activity with stakeholders including recreational and show horse riders, and moderate-income track, show and stable employees and volunteers.

The median income for all U.S. households is $36,000, while the median income for horse-owning households is $60,000. Fourteen percent of horse-owning households have incomes under $25,000, 38% under $50,000 and 64% under $75,000.

Study Done by Barents Group
The National Economic Impact Study of the Horse Industry was commissioned by the AHC Foundation in 1996. The year-long study was conducted by Barents Group, LLC, the economic and fiscal consulting unit of KPMG Peat Marwick LLP.

The Economic Impact of the Horse Industry in 11 States:

California
•The California horse industry produces goods and services valued at $3.4 billion.
•The national industry has an $11.4 billion impact on the California economy when the multiplier effect of spending by industry suppliers and employees is taken into account. Accounting for off-site spending of spectators would result in an even higher figure.
•720,500 Californians are involved in the industry as horse owners, service providers, employees and volunteers. Even more participate as spectators.
•The California horse industry directly provides 36,000 full-time equivalent (FTE) jobs. Spending by suppliers and employees (in California and other states) generates additional jobs in California for a total employment impact of 124,400.
•There are 642,000 horses in California, over 70 percent of which are involved in showing and recreation.

Colorado
•The Colorado horse industry produces goods and services valued at $754 million.
•The national industry has a $2.6 billion impact on the Colorado economy when the multiplier effect of spending by industry suppliers and employees is taken into account. Accounting for off-site spending of spectators would result in an even higher figure.
•191,600 Coloradans are involved in the industry as horse owners, service providers, employees and volunteers. Even more participate as spectators.
•The Colorado horse industry directly provides 7,700 full-time equivalent (FTE) jobs. Spending by suppliers and employees (in Colorado and other states) generates additional jobs in Colorado for a total employment impact of 30,800.
•There are 194,000 horses in Colorado, over 60 percent of which are involved in showing and recreation.

Florida
•The Florida horse industry produces goods and services valued at $2.2 billion.
•The national industry has a $6.5 billion impact on the Florida economy when the multiplier effect of spending by industry suppliers and employees is taken into account. Accounting for off-site spending of spectators would result in an even higher figure.
•244,200 Floridians are involved in the industry as horse owners, service providers, employees, and volunteers. Even more participate as spectators.
•The Florida horse industry directly provides 18,600 full-time equivalent (FTE) jobs. Spending by suppliers and employees (in Florida and other states) generates additional jobs in Florida for a total employment impact of 72,200.
•There are 299,000 horses in Florida, over 70 percent of which are involved in showing and recreation.

Idaho
•The Idaho horse industry produces goods and services valued at $179 million.
•The national industry has a $0.9 billion impact on the Idaho economy when the multiplier effect of spending by industry suppliers and employees is taken into account. Accounting for off-site spending of spectators would result in an even higher figure.
•112,500 Idahoans are involved in the industry, as horse owners, service providers, employees, and volunteers. Even more participate as spectators.
•There are 120,000 horses in Idaho, over 70 percent of which are involved in showing and recreation.

Illinois
•The Illinois horse industry produces goods and services valued at $1.3 billion.
•The national industry has a $3.8 billion impact on the Illinois economy when the multiplier effect of spending by industry suppliers and employees is taken into account. Accounting for off-site spending of spectators would result in an even higher figure.
•213,000 Illinoisans are involved in the industry as horse owners, service providers, employees, and volunteers. Even more participate as spectators.
•The Illinois horse industry directly provides 15,900 full-time equivalent (FTE) jobs. Spending by suppliers and employees (in Illinois and other states) generates additional jobs in Illinois for a total employment impact of 49,400.
•There are 219,000 horses in Illinois, over 70 percent of which are involved in showing and recreation.

Kentucky
•The Kentucky horse industry produces goods and services valued at $1.2 billion.
•The national industry has a $3.4 billion impact on the Kentucky economy when the multiplier effect of spending by industry suppliers and employees is taken into account. Accounting for off-site spending of spectators would result in an even higher figure.
•128,800 Kentuckians are involved in the industry as horse owners, service providers, employees and volunteers. Even more participate as spectators.
•The Kentucky horse industry directly provides 16,600 full-time equivalent (FTE) jobs. Spending by suppliers and employees (in Kentucky and other states) generates additional jobs in Kentucky for a total employment impact of 52,900.
•There are 150,000 horses in Kentucky, over 50 percent of which are involved in showing and recreation.

Maryland
•The Maryland horse industry produces goods and services valued at $614 million.
•The national industry has a $1.5 billion impact on the Maryland economy when the multiplier effect of spending by industry suppliers and employees is taken into account. Accounting for off-site spending of spectators would result in an even higher figure.
•82,900 Marylanders are involved in the industry as horse owners service providers, employees and volunteers. Even more participate as spectators.
•The Maryland horse industry directly provides 6,700 full-time equivalent (FTE) jobs. Spending by suppliers and employees (in Maryland and other states) generates additional jobs in Maryland for a total employment impact of 20,000.
•There are 82,000 horses in Maryland, over 60 percent of which are involved in showing and recreation.

New York
•The New York horse industry produces goods and services valued at $1.7 billion.
•The national industry has a $4.8 billion impact on the New York economy when the multiplier effect of spending by industry suppliers and employees is taken into account. Accounting for off-site spending of spectators would result in an even higher figure.
•258,100 New Yorkers are involved in the industry as horse owners, service providers, employees and volunteers. Even more participate as spectators.
•The New York horse industry directly provides 12,800 full-time equivalent (FTE) jobs. Spending by suppliers and employees (in New York and other states) generates additional jobs in New York for a total employment impact of 49,500.
•There are 146,000 horses in New York, over 60 percent of which are involved in showing and recreation.

Ohio
•The Ohio horse industry produces goods and services valued at $776 million.
•The national industry has a $2.8 billion impact on the Ohio economy when the multiplier effect of spending by industry suppliers and employees is taken into account. Accounting for off-site spending of spectators would result in an even higher figure.
•263,500 Ohioans are involved in the industry as horse owners, service providers, employees and volunteers. Even more participate as spectators.
•The Ohio horse industry directly provides 11,400 full-time equivalent (FTE) jobs. Spending by suppliers and employees (in Ohio and other states) generates additional jobs in Ohio for a total employment impact of 36,200.
•There are 192,000 horses in Ohio, over 70 percent of which are involved in showing and recreation.

Oklahoma
•The Oklahoma horse industry produces goods and services valued at $762 million.
•The national industry has a $3.3 billion impact on the Oklahoma economy when the multiplier effect of spending by industry suppliers and employees is taken into account. Accounting for off-site spending of spectators would result in an even higher figure.
•214,600 Oklahomans are involved in the industry as horse owners, service providers, employees and volunteers. Even more participate as spectators.
•The Oklahoma horse industry provides 14,500 full-time equivalent (FTE) jobs. Spending by suppliers and employees (in Oklahoma and other states) generates additional jobs in Oklahoma for a total employment impact of 51,500.
•There are 278,000 horses in Oklahoma, over 70 percent of which are involved in showing and recreation.

Texas
•The Texas horse industry produces goods and services valued at $1.7 billion.
•The national industry has a $7.1 billion impact on the Texas economy when the multiplier effect of spending by industry suppliers and employees is taken into account. Accounting for off-site spending of spectators would result in an even higher figure.
•606,300 Texans are involved in the industry as horse owners, service providers, employees and volunteers. Even more participate as spectators.
•The Texas horse industry directly provides 29,100 full-time equivalent (FTE) jobs. Spending by suppliers and employees (in Texas and other states) generates additional jobs in Texas for a total employment impact of 98,800.
•There are 678,000 horses in Texas, over 70 percent of which are involved in showing and recreation.

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