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HARTPURY
UNIVERSITY
FdSc EQUINE
PERFORMANCE
Applied Stud management
Revised Draft of Why TB
stud fees are higher than
WB stud fees
HYC50072546
th
Submission Dateline: 10
February 2021 at 2pm
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Summary:

Thoroughbred horse racing is one of the luxury sports industries and a source of revenue. The main
explanation why horses are raced on tracks is horses bred. The traditional practice for stud fees is
paying for the breeding rights services offered the stallion owners to the stallion owners. After the
breeding procedure is complete, the born or raised foals are then put on the market for thoroughbred
horses. These markets were also known as auctioning. Due to their age between 1 and 2 years, the
foal named yearling has not yet stated race competition. This course gives a certain idea of
appropriate or accurate pricing procedures to decide and evaluate the main element of study fees
when assessing the anniversary price or sales market and the reasons to determine why
thoroughbred student fees are higher than warmblood studying fees. It also demonstrates the
important role played by mothers and sisters to study fee, study descent, and other essential
functions to determine the reason for the substantial changes in prices visible on the annual market.
The research shows, further information on good race records or tracks records is only provided by
the UK study fee, which is mainly responsible for attracting high cost of the thoroughbred breeding
process and real valuation of annual auction/pricing markets. The effect of studies on the sale
market of warm blood does not play any part in the determination or valuation of the price of warm
horses.
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Introduction:
Many research studies show the key factors in determining a racehorse stud's price. Evaluating
thoroughbred foal bodies shows that the broodmare price is related, not to her performance on the
track, to her sire's bucking fee, age and the success of her former progeny as strong pricing
determinants (Maynard and Stoeppel, 2007). Furthermore, studies have shown that annual prices
are determined by individual features and macroeconomic variables (Buzby and Jessup, 1994;
Chezum and Wimmer, 1997; Karungu et al., 1993; Neibergs and Thalheimer, 1997; Parsons and
Smith, 2007; Poerwanto and Stowe, 2010; Robbins and Kennedy, 2001; Vickner and Koch, 2001)
The fee for stud is the price charged by the breeding permit of sire and is of vital importance for
determining the actual price of his foal. Unlike broodmare and yearly rates, the Sir Stud fees do not
depend on the auction but the manager of Stallion or owner (Stowe, 2013).

Key Factors of determining thoroughbred stud fee:

The charging depends on the consistency, racing success and progeny quality of a sire. It is the
mechanism by which measures of student fees begin to adjust from the beginning of the student's
career. When a sire begins his career inbreeding, the breeding standard of the sire begins with
knowledge known or accessible. These include the initial sales price of the stallion breeding,
weanling sales price, annual sales price, 2-year-old sales prices, 2-year-old income, etc. At the same
time, study fees rely on the success of their careers and the consistency of their descent. Not all of
the sires have long careers; most have short or small careers in this process. Thoroughbred breeders
make breeding decisions often involving high stakes and high risks, and also critical considerations
for decision making in detailed statistical analysis. Tuition fees have a huge impact on selling rates
for annuals.
According to Kim, J.S., Mitchell, S.D. and Wang, L.C., 2018 research paper of Hedonic Pricing and
Forecasting in the Market for Thoroughbred yearlings current hedonic pricing in Australia
determined by some key factors, such as significant price variations at yearling auctions, the
correlation between siblings and yearling's sales price from the previous auctions, price variations
based on yearling's dam's sire's as well as siblings racetracks record, the progeny of parents and
their race performance. Older yearling's baseline model results which also impacted by bloodline,
the parents (sire and dam) age-positive for younger parents/ negatively for older aged parents,
foreign buyers premium pay 30% over than domestic buyers, forecasting to assess the hedonic price
and concluding remarks of the average price of each sire and dam's previously sold progeny which
influence positively & significantly on the yearling's sale price at auction.
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The sales stud fee for the Stallion provides an indication of the current assessment of an elite horse
production capacity for the Stallion. The stud industry attracts stallions with a successful career in
the race extremely well, and thus stud fees are increasing or higher. Therefore, it is assumed that
stud fees would yield more valuable data than just determine the characteristics of the Stallion to
analyse the price of a one or two-year-old horse.
The quality of a sire's progeny will also depend on the mare with which the sire breeds. Cultivators
also consent selectively to include a Stallion producing colt or filly with several juices. In this
activity, it is certainly what the sire's fee is, which obtains information concerning the sale prices of
its breeding standard, the connection between its noticeable features and the quality of its current
progeny from previous midwiferies stalks. The variables of hen and wildfire for the average race,
number of wins and a dam study when they're raced but never won. For each event, the average
race ranks are determined by dividing the position of the horse by the number of horses involved.
The average number of the races in which the horse participated then uses all these figures.
The derby eligibility can also be used to assess sire consistency. It is determined based on the
horse's pedigree by two traditional quantitative output measurements – the dosage index (DI) and
the distribution centre (CD). These measures enable a horse to manage the different distances on
which horse races are completed. These measures are expected. Low scores, particularly the DI
below 4.00 and the CD below 1.25, mean that the horse will be qualified for Derby for longer
distances typical of the high stakes. Include a variable dummy equal to 1 if a one-year sire is
qualified for derby following these DI and CD requirements. Throughout history, the utility of these
three actions has been challenged. Tell DI forecasts that horses with a DI higher than 4.00 are
extremely unlikely to win a Derby.

Father's characteristics
The successful record of better-performing parents or yearlings contributes to the fact that rates are
more expensive. The first charge of your father or sire when the birthday takes place. The age of the
father is a percentage of one year of the sale minus one year of birth.
It is imperative to use the studio fee, which is the price payable to the owner of a stallion by the
owner of a broody, to raise the owner of the Stallion. Highly coveted stallions normally have a more
expensive stud fee for improved performance or records. This study found in the UK used stud fees
to measure the consistency of the stallions. The calculation is permanent and very acceptable. The
study also found in the UK and the USA to be able to calculate the number of races it won (SWIN)
for thoroughbred stallions by if it has won any special championship titles (SCHAMP) and whether
it is qualified for Derby (DERBY). The male horses in Australia won special titles, including the
classic distance of 1 mile and a quarter. It also contains the 2/3-year-old Australian champion, Horse
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of the Year and the 3rd in Leading Broodmare or Sires. The dose index (DI) must be below 4 to be
able to be Derby, and its distribution centre (CD) must be lower than 1.25. DI and CD are
measurements of the horse's efficiency. High scores mean that the horse is best over shorter
distances, whereas low scores are an intrinsic preference for lengthy races.

Mother Characteristics
Mother or dam genes also inherit partly from yearlings, such as physical characteristics, heart and
mitochondrial DNA. Thus, a yearling needs to imagine a broodmare r the dam track record.
Just like the dad, when his yearling is born, the power over mother's age. The age of the mother is
known as the year of sale or sale less the year of birth. A mother of a yearling is born around 12
years old on average. Many findings indicate that a mother won an average of 1.75, and a mama
who won the championships has 0.4 per cent yearlings. The fathers have 5.53 and 29%, but a small
proportion of the stingers is highly effective and won a championship title. It also indicates that a
Halllion mainly holds a leading record than a Stallion. Therefore, the rivalry of being a parent
between the mare and the stud can be considered a high quality of a stallion to be a parent. Since
any male horse can match numerous hours of female horses, one must become a parent of the
yearlings much stronger (in terms of history).

Siblings Characteristics and other control variables

The history of the siblings and the parents' features are also important to predict the potential for
annuals. The records of the annual siblings help customers determine whether potential winners can
achieve consistency or skill in future running.
The number of winning siblings the yearling has (WINSIB) and whether any siblings have a winner
needs to be measured for the quality or success of their annual children (WINFOALD). Other
variables are monitored accordingly:
First, the variable Samessire is the number of year-long children by the same father in the same
sales. The same father is the variable Samesire. Secondly, international purchaser access
(FOREIGN). External buyers can have a structural assessment different from the United Kingdom,
USA, or Australia. 'Progeny Cannibalism' is a concept, according to Vickner and Koch (2001), that
'years of the same father who are sold on the same auction can take sales from each other. This may
have an adverse effect on your price. However, the underlying explanation why breeders are likely
to breed more yearlings from a given sire is that their advertising somehow ensures that the breeder
pays a large sum for the yearlings. For both opposing results, the SAME SIRE variable will be used.
Bloodline also constitutes a significant factor in determining study fees and high sales of a yearling
with an elite pedigree. For Hengst to be interested in breeding, the race stats are important. SWIN's
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effective Stallion suggest that annual sales or auction prices increase. Price elasticity estimates
according to a father's SWIN are 27.1 per cent. However, winning data could have a price
underestimate.
Frankel has a 100 per cent record for all his 14 races in the UK racehorse, and he is now in the
breeding sector. His new fee is £175,000 a day (bbc.co.uk, Oct 2017). It is predicted that each year
he will mate with 100 mares, and his progeny is a long way off. He was represented by two winners
of group 1 in the form of Mozu Ascot and Mirage Dancer, Group 1 being the best races this year
alone. (The Sun, October 2020). The annual price elasticity with the contribution to the overall
sibling numbers is 9.6%. It also shows that the good father can produce higher-priced offspring in
the races sought by the growers. A mother bloodline can be an effective factor in improving the
annual prices, particularly if the mother is young and can play an important part in pairing and
gestation in good physical condition. The maternal race records or records are also essential in
deciding the price of the year. The price elasticity estimate according to the winnings of the mother
is 18.3 per cent. On the other hand, the price determination results in the price assessment of these
dams with no income records, which are much lower or negative.

Warmblood stud fees

In the warmblood industry, horses stud can be charged between several hundred and a few thousand
pounds. The average hedonic price could range from £500 to £1000. Preferable is artificial
insemination to reproduce warmbloods. Other main factors are the stallions travelling to get the
right stallions to raise them, temperament and medical treatment, send them to a specialist club, the
cost of foaling and regular care and weaning. The international expansion of the more developed
sport horse races was based on research on developments in warmblood in Europe and the
movement towards smaller and more racial registries. Artificial insemination (AI) has become a
major breeding method with fresh or refrigerated semen, making it possible for breeders across
Europe to profit from most species' best stallions. The interest of breeding programs in sex
determination of foals through semen sorting restricts new AI techniques, such as low-dose
insemination, to the individual Stallion. While most breeds allow the transfer of embryos and their
related techniques, the genetic development in European sport horses so far has not been important.
A possible application of cloning may be to generate intact gonadal copies of gelding at a higher
stage. With a more open international horse breeding structure and the use of AI, the veterinary
curricula and the continuing professional education programs should emphasise equine reproduction
and biotechnology.
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Conclusion:
The hedonic price of the studio fee and the yearly price has been seen in this study to understand
why it is costly and how the thoroughbred industry's price viability varies from the warmblood
sector. The annual market evaluation of the sire's progeny is predominant among stud fees, and sire,
dam's and siblings' features or records all play a relative part in determining the annual price.
Similar measurement methods of actual pricing may also be useful in assessing the output of
yearlings following the sale or auction procedure. This can explain some of the factors not
associated with the sale of warmblood and the big reliance on purchasers who show only interest in
sire's progeny and track record and how anniversaries would perform best for future years.

References:

1. Breeding to sell: a hedonic price analysis of leading thoroughbred sire stud fees. (C. Jill Stowe,
pages 877-885, published online: 24 Oct 2011)
2. Ageconsearch.umn.edu/record/196876
3. What determines the price of a racing horse? (Journal, Applied Economics, Volume 45. 2011-
ISSUE 3)
4. Thesun.co.uk
5. bbc.co.uk
6. Hedonic pricing and the role of stud fees in the market for thoroughbred yearlings in Australia
(Jun Sung Kim, Sophie Deborah Mitchell, Liang Choon Wang, First Published: June 2019)
7. Horse&Hound (March 2016)
8. Reproduction in Domestic Animals/ Volume 41, Issue 4/ pages: 275-279
9. Kim, J.S., Mitchell, S.D. and Wang, L.C., 2018. Hedonic Pricing and Forecasting in the Market
for Thoroughbred Yearlings