People from all over the world dropped millions last week at area equine saleBrent Burkey
Many people know Act 71 of 2004 for giving the commonwealth its casino industry, but it's also been by design a boon to all aspects of the horse-racing business. That success can spill over into the rest of the economy, backers say.
The Standardbred Horse Sales Co.'s annual sale, which wrapped up its 74th installment Saturday, takes place at Harrisburg's Pennsylvania Farm Show Complex & Expo Center and resulted this year in nearly $50 million in sales.
Neal Ehrhart has been coming since the mid-1970s and said it doesn't seem to have necessarily gotten larger since then.
But the dynamics have changed quite a bit, said Ehrhart, head trainer of Keystone Trotters LLC, which owns racehorses, and manager of Keystone Driving Force, a racehorse management company. The businesses are based in the midstate.
Prices are higher, and the demand for horses has gone up, he said.
Meanwhile, on the race courses in Pennsylvania, the field has become much more competitive, Ehrhart said.
But with more money available post-Act 71, successful industry participants are better able to earn a good living, said Ginny Ehrhart, owner of Keystone Driving Force and corresponding officer for it and Keystone Trotters.
Neal Ehrhart said the racehorse industry has had an impact on other businesses, including at a nearby automobile dealership that sells diesel vehicles to pull horse trailers. Also, farms have added acreage to supply more hay, and veterinary clinics have added staff.
"It all trickles around," he said.
Standardbred horses are used in harness racing, where a driver rides in a cart called a sulky attached to the horse. Thoroughbreds carry jockeys on their backs and race in events such as the Kentucky Derby.
Support for the two industries is central to Act 71, formally the Pennsylvania Race Horse Development and Gaming Act.
A portion of the billions in revenue generated so far by casino gambling in the state has gone, as the name of the act implies, to developing the racehorse industry in Pennsylvania. Gov. Tom Corbett had suggested redirecting $72 million in development funds as part of the 2012-13 state budget process, but in the end it was limited to $5 million allocated to other funds, according to the Pennsylvania Equine Coalition, which represents more than 10,000 owners and trainers in the state's industry.
With advantages for racing and breeding horses in the state, people such as Adam Bowden of Diamond Creek Farm are moving operations into the state from elsewhere.
His Kentucky operation began about seven years ago, but its home state did not enact a support program for the industry such as the one in Pennsylvania, said Bowden, the business's owner and general manager.
So Diamond Creek acquired a property about a year ago in the Wellsville area in northern York County, and is making investments to permanently transfer a little more than half its operation from Kentucky, he said.
Those investments include putting up three buildings and hiring about 10 local workers, Bowden said.
The business also will buy local feed and hay, and Bowden anticipates transferring at least 75 percent of the operation to the commonwealth in the next few years.
Act 71 has done a lot to increase the competition in Pennsylvania's racehorse business, said Jim Simpson, president and CEO of Hanover Shoe Farms Inc., which has property in Adams and York counties.
He welcomes it and said it has brought a definitive advantage to the local industry.
"It raises the quality of the racing product in the state," he said.
The business is considered the biggest name in its part of the horse-racing industry.
This year, the total gross for the 2,071 horses purchased at the sale was about $49.2 million, according to the Standardbred Horse Sales Co.
Animals coming from Hanover Shoe Farms are expected to gross about $30 million in winnings for their owners this year, Jim Simpson said. It was about $29 million in 2011.
Horses from Hanover Shoe Farms comprised about 10 percent of the animals for sale, Jim Simpson said. The 219 yearlings sold from Hanover went for a combined $8.6 million.
Hanover Shoe makes its money for a given year in six days, Georgia Simpson said: the first four days of the sale in Harrisburg and two days at a sale in Kentucky.
At $825,000, a horse from Hanover Shoe, Detour Hanover, set the record for the highest price for a yearling at the sale last year, according to Standardbred Horse Sales Co.
This year, the top yearling was Churchill Hanover, who sold for $380,000, according to the company.
An estimated 15,000 people attended the Standardbred Horse Sales Co.’s sale in Harrisburg last week, resulting in an economic impact to the midstate of $46.4 million, according to the Hershey Harrisburg Regional Visitors Bureau.
According to organizers of the annual sale, there is a definitive international flavor during the week at the Farm Show complex.
Foreign buyers come from Canada, Scandinavia, Russia, New Zealand and elsewhere. For most of those buyers, shipping home their new horses costs about $10,000 a pop, according to Standardbred Horse Sales Co. statements.
And that doesn’t include the price to buy them in the first place.
During the sale, about 20 languages are spoken in the halls of the Farm Show complex, Hanover Shoe Farms co-owner Georgia Simpson said last week.
About Hanover Shoe Farms Inc.
The modern history of Hanover Shoe Farms began in the early 1920s, when Lawrence B. Sheppard, then a junior partner with the Hanover Shoe Co., began replacing “modest, mediocre stock” with higher-caliber racing stock.
Sheppard is credited with providing the “drive and vision” to transform the Hanover Shoe Stables into Hanover Shoe Farms.
In 1926, Sheppard acquired a 69-horse package from the estate of A.B. Coxe that propelled Hanover Shoe firmly onto the national Standardbred horse scene. It has since acquired some of the biggest names in the racing industry as sires.
In 2001, the farm set the all-time earnings record, regardless of breed, of nearly $21.4 million. That amount has increased more recently, with horses coming from the farm earning about $29 million in winnings for their owners in 2011.
The business’s sires have produced winners of races that are considered the Standardbred racing industry’s preeminent events, such as the Hambletonian, Kentucky Futurity, Little Brown Jug and Breeders Crown.
SOURCE: Hanover Shoe Farms Inc. website and executive statements
About the sale
The Standardbred Horse Sales Co. annual sale recently wrapped its 74th installment at the Pennsylvania Farm Show Complex & Expo Center in Harrisburg.
The company was started in 1939 by Lawrence Sheppard to provide a venue to sell yearlings from Hanover Shoe Farms after the Old Glory Sale, where it previously sold its yearlings, shut down in 1938.
The first installment resulted in more than $95,000 in sales, and the sale passed the $1 million mark for a year in 1947. Overall in 2011, 2,048 horses were sold for more than $55 million, an average of nearly $27,000 per horse.
SOURCE: Standardbred Horse Sales Co. website and statements