Breeding thoroughbreds is a lucrative business. Savabeel, a former Cox Plate winner, commands around $30,000 per session. Stallions like Danehill Dancer, based at Coolmore Stud in the Hunter Valley, earns $110,000 each time he visits a mare. His stablemate Enscosta De Lago earns his owners $220,000 for each mare serviced. Good work if you can get it.

At the other end of the process, three time Melbourne Cup winner Makybe Diva has recently foaled, with her progeny expected to fetch $3 million when sold as a yearling. While that’s the very top end of the market, it illustrates the potential losses faced by thoroughbred breeders as horse flu rages through Australia.

“At the moment, we’re at the very beginning of the breeding season and if we can get some movement in the next week or two we can probably rescue the foal crop,” John Messara, President of the Thoroughbred Breeders Association of Australia, told Crikey. “If the standstill remains for another month or six weeks or thereabout it’s potentially very deleterious.”

Fiona Silke, a livestock industry analyst with IBISWorld, is projecting losses in services to the breeding industry of $100 million for 2007/2008. The drop in yearling sales could be reach 20%. Speaking on ABC Radio this morning, the manager of Emirates Park Stud suggested his operation alone could lose $8-$9 million.

Indeed, the current crisis has the potential to affect balance sheets for years to come.

According to Messara, a small foal crop in New South Wales this year will affect foal sales in 2009, and racing nationwide in 2010 and 2011 when the foals are two and three years old. That means smaller fields, which affects betting, jockeys, trainers, and so on.

In the immediate term, the effects trickle down through the industry. Transporters, vets, and strappers suddenly find themselves with more spare time, while one stud Crikey spoke to said that highly skilled employees, people who have taken years to train, were already leaving the industry.

Reducing the movement of horses threatens not only the numbers of foals, but their quality. While the movement of quality stallions between states or even countries remains banned, mares will go unserviced.

General Manager of Coolmore Stud, Michael Kirwan, says the yearling crop will be “decimated” if the restrictions on horse movements aren’t lifted within a month. “Many of the stallions at the top end of the market are stuck in quarantine in Sydney, so a lot of highly bred animals that command the bigger prices are currently out of action,” Kirwan told Crikey.

“But it’s only the first week of September. If the stallions are released by the first week of October, it’s not the end of the world. If we lose September we can pick up from it.”

The President of the Equine Veterinarians Association, James Gilkerson, maintains his faith in the quarantine system as a means of controlling the outbreak. He agrees that all is not yet lost for the current breeding season, but can’t say when business might return to normal.

“Obviously equine flu travels from horse to horse to horse, but that’s not a particularly fast means of spread compared to sticking a horse in a truck and transporting it hundreds or thousands of kilometres,” Gilkerson told Crikey. “But what we’ve learned from outbreaks overseas, in South Africa primarily, but also in Japan and Hong Kong, is that if you can restrict the movement of horses, you stop the virus travelling long distances.

“When we start testing horses that only return negative tests we can say we have got on top of it. But how long that will take, I don’t know.”

Peter Fray

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