Not Just Simple Math

There are appraisers who will tell you they can appraise any kind of horse. Really? It's not just simple math. Appraising is more than just mathematical formulas, where an appraiser "pluses" or "minuses" to arrive at a reliable valuation. In my opinion, appraisers who say they can appraise any horse, even ones they don't have personal experience with, are missing a few key elements.


Ethics

The American Society of Equine Appraisers has a published Code of Ethics. The first principle is straight forward:

The appraiser shall achieve and maintain a high level of competence, shall keep himself or herself informed as to all matters involving or affecting livestock and equine values, and shall accept only those assignments for which he/she has the necessary background and qualifications.

Standards

Without a clear understanding of breed standards, it is impossible to accurately evaluate the subject equine. Conformation, movement, and even manners can be defined in a particular breed's standards. They vary from breed to breed. Some breeds even have multiple registries with differing ideals. And, competitive associations have their own rules, standards, and awards. An acceptable and legal practice in the presentation of one breed of horse may be frowned upon or illegal in another.


Contacts

Unlike real estate and some commodities, there isn't a central market for horse sales. As such, there is no single repository for historical horse prices by breed, sex, and discipline. Each appraisal is researched on its own merits. The starting point is a strong network of contacts throughout various segments of the equestrian community. Sales barns and auctions provide guidance around the whole market, but it is private treaty sales - sales between individual buyers and sellers - that make up the bulk of sales comparisons for most breeds. Appraisers must continuously groom their network of owners, agents, and others to keep an accurate pulse on the rhythms of each breed, discipline, and level within each market.

The attorneys we work with know they can count on us to be experts in certain areas. And, we're quick to refer them to experts in other areas when necessary. For example, I do not have the background or network to appraise a Mule, a Gypsy Vanner, or a working Carriage Horse - though I have recently offered referrals for all of these.

We're lucky to have a well rounded team at Sterling Equine Appraisals. We have team members who focus on specific breeds and specific disciplines. They participate and interact in that segment of the horse industry every day, keeping their eyes well trained and their skills up to date with current market trends. This pool of resources allows us to appraise a wide variety of horses...but I'd never say we "know it all!"

Current Trends in the Horse Industry

Here is a copy of a recent e-newsletter from Al Dunning. It should be required reading for Associations and trainers alike!

The Way I See It – Current Trends in the Horse Industry

The Hands-on Owner Returns! The economy seems to be making a slow comeback as indicated by the rise of the stock market and retail sales.The housing market in Arizona is still in a depressed state and the unemployment rate remains at an all-time high.

People have made big changes in the way they live and the way they spend their money, and this filters into every niche of business, including the horse industry. My view of the horse economy admittedly comes only from my current experiences, but seems to be the norm for many trainers.

In the past few years I’ve seen horse sales, the number of people participating in shows, and the amount of discretionary income spent in the industry decline. I thought that the high-end market for horses remained strong until the summer of 2010. After that time, our sales to new customers and the economic flow went south. The jobless rate in the horse industry has noticeably increased as we get calls daily from experienced trainers to grooms looking for jobs.

I have caught a glimpse of the light at the end of the tunnel in early 2011, and economic predictors say the end of 2012 will see an upturn in the economy. I have noticed something interesting happening. The baby boomers have finally decided that it is time to have fun and ride horses. They are coming back to the horse industry after raising children or tending to their careers. Many of these riders have been hands-off horse owners for many years. They may have had horses in training and paid entry fees at large aged events for the trainers to show. They now want to compete themselves. The NCHA and other major associations offer entry level classes for the amateur riders that allow this group to participate with fellow horsemen at the same level.

This trend has led to an increase in demand for that good, solid, trooper of a horse that amateur riders can learn and compete on. The AQHA announced a major decline in stallion breeding reports the last few years, which means the supply is down while demand is headed up. It doesn’t take a rocket scientist to realize a smart trainer should take care of these re-emerging hands-on riders and train horses that suit the weekend warrior. Showing at a local level is still a major investment for owners, but they are doing it for pure love of the sport and to advance their lifestyle. If they are going to spend the money, many owners would rather spend a weekend showing themselves, than write a big check for the trainer to go to a large event.

Trainers must set their personal desires aside and open their eyes to the reality of what the industry is asking for.

The way I see it, the enthusiastic newcomer and the hands-on amateur are the foundation of our industry. Local level and weekend shows are drawing those that ride and show for pure enjoyment and personal fulfillment. Older, solid horses are going to be sought after and in demand. The horse industry will rebound, and I believe it will be stronger than ever.

Change isn’t a bad thing, and flexibility is the key to surviving these shaky economic times.