Equine Economic Impact – Horse Economic Impact

Equine Economic Impact – Horse Economic Impact
The Economic Impact of the Horse Industry in the United States
By:American Horse Council Foundation,Deloitte (Firm)
Deloitte, 2005

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Equine Economic Impact - Horse Economic - Horse Economic Impact - Economic

The United States Horse Industry is a large and economically diverse industry that is a key contributor to the overall fabric of the U.S. economy. Horse owners and industry suppliers, racetracks and off-tracking betting operations, horse shows and other industry segments all generate discrete economic activity contributing to the vibrancy of the overall industry. The spending generated within the horse industry, and the subsequent spending between co-dependent industries contributes thousands of jobs and billions of dollars to the economy on an annual basis.

The significance of the industry is reflected in the following bullets:

The horse industry contributes approximately $39 billion in direct economic impacts to the U.S. economy on an annual basis.
When considering indirect and induced spending, the horse industry annually generates approximately $102 billion dollars for the U.S. economy.
Of the total economic impacts reported, approximately $26.1 billion is generated from the racing segment, $28.8 billion from the showing segment, and $32.0 for the recreational segment.
Approximately 1.8 million people own horses, with another 2 million people involved as volunteers or through a family affiliation.

The horse industry sustains approximately 1.4 million full-time equivalent jobs on an annual basis, with over 460,000 of those jobs created from the direct spending within the industry.
There are approximately 9.2 million horses in the U.S. with approximately 3.9 million involved in recreation and another 2.7 million horses participating in horse shows.
The median household income of those individuals and families owning horses is around $X, with approximately 34% of the industry having a median household income of less than $50,000 and 28% of the horse owning population having an annual income of over $100,000.
The horse industry pays approximately $1.9 billion in taxes on an annual basis to all levels of government.

This study was commissioned by the American Horse Council Foundation in June of 2004. This study was performed on behalf of a “Project Steering Committee” consisting of representatives from several other industry organizations including The American Quarter Horse Association, The U.S. Equestrian Foundation, The Jockey Club, and the National Thoroughbred Racing Association. The study was conducted by Deloitte LLP and completed in June 2005. Equine Economic Impact – Horse Economic Impact

The horse industry contributes approximately $39 billion in direct economic impact to the U.S. economy, and supports 1.4 million jobs on a full-time basis. When indirect and induced spending are included, the industry’s economic impact reaches $102 billion.

Some key industry statistics and economic indicators:

Estimated number of horses in the U.S.

9.2 million

Estimated number of horses in each of the 50 states

Texas (1 million), California (700,000) and Florida (500,000) are the leading horse states

45 of 50 states have at least 20,000 horses

Direct, indirect and induced economic impacts of the industry in U.S.

Contributions to the Gross Domestic Product (GDP)

$102 billion via direct, indirect and induced spending

Number of Full-Time Equivalent (FTE) jobs produced

1.4 million

Estimated number of horses by activity

Recreation- 3,906,923

Showing- 2,718,954

Racing- 844,531

Other- 1,752, 439

Estimated number of horses by breed

Quarter Horse- 3,288,203

Thoroughbred- 1,291,807

Other- 4,642,739

“This study paints a portrait of an industry that operates in every corner of the country and contributes mightily to the American economy and culture,” AHC president Jay Hickey said in a release. “Never before has the impact of our industry been so dramatically demonstrated.”
The study, which encompasses all breeds of horses, says there are about 9.2 million horses in the U.S. The recreational segment accounts for $32 billion of the total economic impact, followed by the horse show segment at $28.8 billion and the racing segment at $26.1 billion.
The largest single contribution to the gross domestic product comes from Thoroughbred racing at $20.8 billion.
In the racing sector alone, about 430,000 horses are involved in the breeding process, which has a direct impact of $2.5 billion on the industry and total economic impact of almost $6 billion.
The study also offers a comparison of revenue to expenses that supports a common belief in the horse industry. Total revenue from all segments is $1.17 billion, while expenses come in at $2.88 billion. Expenses therefore exceed revenue 240%.
For racing alone, expenses exceed annual revenue by $1.5 billion, the study says. For show horses, the figure is $2 billion; for recreational horses, it’s $1.8 billion. The average is $1.7 billion in expenses over revenue.
“This per horse revenue and expenses analysis indicates that horse ownership is generally not undertaken as a profit-making operation,” the study says.
The study estimates that 4.7 million people participate in the horse industry, 1.8 million of them as owners. The industry provides about 700,000 jobs across all sectors.
Fifteen breakout states account for more than 51% of the U.S. horse population. Texas has the most horses with 978,822, followed by California (698,345), Florida (500,124), Oklahoma (326,134), and Kentucky (320,173).
In terms of total effect on the U.S. gross domestic product, California leads the way at $6.97 billion a year, followed by Texas ($5.23 billion), Florida ($5.15 billion), Kentucky ($3.54 billion), and Louisiana ($2.45 billion).