PRICE EXPECTATIONS AND SUPPLY RESPONSE IN THE THOROUGHBRED YEARLING MARKET

Limited information is available concerning price determination in the thoroughbred yearling market. A recursive model incorporating price expectations and biological constraints is used to estimate supply and demand functions for thoroughbred horses. Empirical results characterize a market with inelastic supply and elastic demand that converges to equilibrium under static conditions. Purses were identified as the most influential variable impacting price. Comparative statics illustrate the effectiveness of purses as a policy instrument for the thoroughbred industry. Federal tax policy also was found to have a significant impact on the decisions to breed or invest in thoroughbred yearlings.Elasticity, Parimutual horse racing, Price determination, Price flexibility, Purses, Thoroughbred, Yearling, Demand and Price Analysis, Livestock Production/Industries,

MAXIMUM-LIKELIHOOD ESTIMATES OF RACEHORSE EARNINGS AND PROFITABILITY

Thoroughbred racehorses are commonly characterized as unprofitable investments. Previous studies, grouping all racehorses together, estimate that over 80% of all racehorses in training fail to earn enough to recover the variable costs of training. However, these studies are not truly representative, because they fail to account for a number of factors affecting profitability. This study estimates expected purse earnings and profitability of claiming horses in Kentucky. Maximum-likelihood estimates of probability distribution parameters show that expected purse earnings follow an exponential distribution with a mean of $25,267. Profitability is best described by a Gamma distribution with a mean of$4,824. Of the 305 claims analyzed for profitability, 61% were profitable. The results indicate substantial financial risk associated with claiming race horses, but conclude that there are positive economic returns on average.claiming horses, financial risk, maximum likelihood, probability, profitability, thoroughbred, Agribusiness,

AN ECONOMIC ANALYSIS OF THE EFFECTIVENESS OF THOROUGHBRED BREEDER/OWNER INCENTIVE POLICIES

Thoroughbred incentive programs are subsidy policies funded from state parimutuel tax revenue designed to promote regional race horse breeding and ownership. At issue is an ongoing debate concerning the effectiveness of alternative policies. Empirical results indicate that incentive programs have a positive economic effect, but gains to Thoroughbred breeders can be obtained by reallocating tax revenue to non-restricted purses. A policy allocating tax revenue ton non-restricted purses shifts yearling demand and increases prices, while breeder subsidies shift only the supply function and therefore lower prices. Consequently, breeder revenues increase in response to a policy that favors non-restricted purses over subsidies.incentive programs, parimutual horse racing, subsidy, tax, Thoroughbred, Agricultural and Food Policy,

AN ANALYSIS OF THE ECONOMIC EFFICIENCY OF THOROUGHBRED BREEDER/OWNER INCENTIVE POLICIES

Thoroughbred incentive programs are subsidy policies designed to promote regional race horse breeding and ownership. At issue, is an ongoing debate concerning the effectiveness of alternative policies. Empirical results indicate the programs have a positive economic affect, but gains in efficiency can be obtained by reallocating funds to open purses.Livestock Production/Industries,

Kentucky Parimutuel Revenue Policy Simulator

Since Kentucky introduced inter-track wagering in 1988, and inter-state wagering in 1994, there has been an ongoing substitution of declining live handle with increasing simulcasting handle. Also, since 1995 there has been a marked increase in competition from alternative gaming. At issue is the net effect on parimutuel stakeholder revenue relative to changes in the distribution of parimutuel handle and increased competition. This paper presents a parimutuel revenue budget that can be used to evaluate the marginal revenue of changes in policies, or of actions taken in response to increased competition from alternative gaming

Extension Education Drives Economic Stimulus Through Trade Adjustment Assistance for Farmers

Trade Adjustment Assistance for Farmers (TAAF) is a national multifaceted USDA program that provided technical and financial assistance to farmers and fishermen adversely affected by import competition. This article describes how Extension was successfully mobilized to deliver the TAAF program to 10,983 producers across the nation using innovative education technologies to achieve program objectives and improve the economic well-being of participating farmers and fisherman. The innovative technologies included online curricula and business planning, the use of personal business planning consultants, and linking Extension education outcomes to financial assistance payments that producers used primarily to invest in their business

Livestock and the Environment: A National Pilot Project. The Policy Space, Economic Model, and Environmental Model Linkages

To address the growing problem of environmental degradation from livestock operations, the U.S. Environmental Protection Agency has sponsored a multidisciplinary project called Livestock and the Environment: A National Pilot Project (NPP). This report details the linkages among the policy space, the dairy farm economic model, and the environmental fate and transport simulation models. A summary of the NPP\u27s conceptual framework illustrates the overall model organization and linkages within the NPP

Dynamics and Trends in the U.S. Dairy Industry

Fueled by economic forces, dairy sector policies, technological progress, and strict environmental regulations the U.S. dairy industry is consolidating into large, confined animal feedlot operations (CAFOs) and concentrating in a few localized areas. These structural changes produced a disproportionate impact on the local areas, exacerbating local dairy waste pollution problems because of introducing manure nutrients at a rate far in excess of environmental assimilative capacity. The national, regional, and state-level trends in the dairy industry are examined, with the objective of identifying forces that are responsible for this structural change. The structural change will create winners and losers among traditional dairy farms, rural communities, and environmental integrity. Therefore, public policy has an important role to play in balancing the cost of a changing dairy industry with the benefits to society at large from a more economically efficient and environmentally sound industry

Conceptual Framework for the National Pilot Project on Livestock and the Environment

Assessing the effects of alternative policies that regulate nonpoint pollution from concentrated animal feeding operations (CAFOs) requires insight into the interactions of livestock production practices, waste management technologies, and their impacts on the environment. CAFOs have been identified as a source of nutrient loadings that impair ground and surface water quality, and they can emit intense odor that impairs air quality. This report describes the conceptual framework and the integrated modeling system being developed to evaluate the economic and environmental impacts of alternative policies that abate pollution from CAFOs

Developing Herd Health Education for and Assessing Risky Practices of Cow-Calf Producers

Bovine respiratory disease (BRD) is an often unrecognized problem in cow-calf herds. We describe a program we used to help producers identify and avoid practices that could increase their herds\u27 risk for BRD. The greatest knowledge gains occurred for the topics of costs associated with BRD, BRD risks at the feedlot, and biosecurity measures. Through producer self-assessments, we found that the number of risky practices conducted by producers ranged from none to 22 per operation, averaging 10 per operation. Extension professionals should consider combining producer self-assessment with education on management as an effective strategy for informing producers of risks in their operations