Thoroughbred breeding is heading back to the 1960s: The foal crop for 2012 is projected to be the smallest since 1971, and it could be smaller still in subsequent years.
The Jockey Club on Saturday released its annual prediction based on received reports of mares bred. Only 24,700 foals are expected next year in North America, down 8.5 percent or 2,300 foals, from the 27,000 foals registered for 2011, said Matt Iuliano, Jockey Club executive vice president and executive director.
"I think probably it's the best thing for the industry right now," said Bill Mauk, a bloodstock agent in Lexington. "We've been in over-production for a long time now."
Fewer foals means less money for many aspects of the racing and breeding industry: fewer mares and babies boarded at farms, fewer stud fees paid, less revenue for the Breeders' Cup Championships, less competition for top races like the Kentucky Derby, fewer horses to sell at Keeneland and Fasig-Tipton's auctions.
But with demand down for horses by at least a third from pre-recession highs, future scarcity could improve market conditions.
"With the foal crop smaller, that means we can drive up prices," Mauk said. "I think what they're forecasting for 2012 is about as low as it might get. And that's good. We way over-bred."
Next month, the breed's registry will announce state-by-state numbers for the 2011 foal crop and, in October, details of this year's breeding season will be released.
The forecast for next year shows a continuation of the contraction in the breeding industry that has gone on since 2005, when more than 38,000 foals were born. And it is down 44 percent from 1990, when there were 44,143 foals registered.
The contraction in the supply of future racehorses appears to have slowed some. In 2010, the number of foals fell by 4,000, or 11.8 percent; in 2011, by 3,000, or 10 percent.
But a new economic report presented at the annual Jockey Club Round Table in Saratoga Springs, N.Y., on Sunday indicated that the sport might be looking at huge additional cuts.
According to the report by management consulting firm McKinsey & Co., if new growth strategies are not implemented, the foal crop will drop an additional 9 percent in the next decade; Thoroughbred racing handle will decline an additional 25 percent in the next decade; the number of viable tracks will decline by 27 percent; and an owner's losses will grow by 50 percent.