Poultry may soon rule the roost on Kentucky farms

AP News
Posted: Dec 10, 2009 3:27 AM

Kentucky's slumping horse industry appears on pace to be overtaken by poultry farming as the king of the state's agricultural sector.

In a state where horses are a mainstay of the cultural and economic lifeblood, the new top perch for chickens in the pecking order of Kentucky agriculture once seemed unlikely.

But the equine sector has been battered by deep recession, and the poultry industry has enjoyed years of steady growth. As a result, University of Kentucky agricultural economist Lee Meyer predicted receipts from the poultry sector this year would outpace those from the horse industry by about $180 million.

Poultry production, concentrated in western Kentucky, is expected to generate about $930 million in receipts this year, Meyer said. The equine sector is projected to generate about $750 million this year, down from more than $1.1 billion in 2007, he added.

That projection was seen by former Gov. Brereton Jones, owner of a Kentucky horse farm, as further proof that the state's horse industry is in decline and needs a boost.

"You can go anyplace around the world and tell people you're from Kentucky, and the first thing they want to talk about is the Kentucky Derby and the thoroughbred industry," he said. "We risk losing that if everybody refuses to pay attention."

Jones supports expanding gambling at Kentucky's horse racing tracks. A measure to allow video slot machines at tracks passed the Kentucky House but died in a Senate committee during this year's special session.

Thoroughbred sales and breeding stud fees are the two main income sources for the industry, but have taken a big hit from the global recession, University of Kentucky economists said last week.

Sale prices at the major thoroughbred auctions at Keeneland continued a downward spiral this year, especially at its premier yearling sale in September, where totals were down 41 percent from a year earlier. Results weren't quite as bad at November's breeding stock sale, which saw a 14 percent drop from 2008, but that sale was helped by a dispersal of 148 horses from the great Kentucky breeding operation Overbrook Farm.

Several prominent Kentucky horse farms also reported declines in the stud fees they charge for a live foal. Lane's End Farm announced it was cutting A.P. Indy's fee from $250,000 to $150,000. There are also major drops in stud fees for other top stallions, including Distorted Humor and Giant's Causeway.

The weak economy also has hurt demand for recreational and show horses, the economists said.

Poultry production, meanwhile, has been growing for years in Kentucky.

In 2001, poultry receipts totaled about $260 million but had doubled by 2003 and mushroomed to $918 million in 2008. Meyer projected poultry receipts of $976 million in 2010.

"I can't imagine a scenario where horses would come back to predominance for three years," he said.

The poultry sector has benefited from strong consumer demand, solid exports and the popularity of chicken products at fast-food restaurants, Meyer said.

"Usually you increase supply, prices come down," he said. "But if demand truly increases from a preference perspective, then you can have higher prices and higher production. And that's what happened."

He predicted that Kentucky equine receipts will reach an estimated $807 million in 2010.

Jones said those figures don't include the considerable tourist dollars generated by the horse industry.

"You don't get those tourism dollars from the chicken industry," he said in an interview. "If you counted all the dollars, I think the horse industry would still be ahead."

Longtime breeder Arthur Hancock, owner of Stone Farm in central Kentucky, said the horse industry faces a supply-and-demand problem.

"We don't need to be breeding so many horses," he said in an interview. "There are too many horses for the number of buyers out there."

Still, the horse industry has a special allure, Hancock said.

"Nobody's going to come to the state to see chickens. We're still a wonderful industry with a lot of beautiful farms, and we're going through some tough times."


Associated Press Writer Jeffrey McMurray in the Lexington, Ky., bureau contributed to this report.