Horse Slaughter - Economic QuestionsTo Here Radio show on Horse SlaughterThere has been a lot of talk lately about the ending of processing horses for meat in the U.S. There have been many opinions on both sides pro and con. Many people have very strong opinions based off of their own personal beliefs of the morality of horse processing for meat. But what may be needed now is more questions and less opinions, especially when looking at the economic side of banning the horse meat industry.
When looking for facts about the horse industries impact on the U.S. economy and the subsequent impact of the horse meat industry on that same economy I found the following.
The American Horse Council released a horse industry study on June 28, revealing that the industry contributes $39 billion in direct economic impact to the U.S. economy. The study also estimates there are 9.2 million horses in America. One impact analyst study I read said that every horse in the US would be worth $304.00 less. Which when multiplied by the 9.2 million horses in America comes to a total equity loss of $ 2,796,800,000.00, almost 3 billion dollars. To bring it closer to home, a rancher with 100 head of horses will have a total equity loss in his horses of $30,400.00.
This would lead to another question. What industry can hemorrhage 3 billion dollars and survive? Secondly based off of the American Horse Councils study, that’s a loss of almost 10% of the industries total yearly contribution of $39 billion in direct economic impact to the U.S. economy. The trickle down effect of this loss on horses owners and non horses owners alike is terrifying.
In college, one of my business professors taught us that money should circulate through a community 8 times before it became dormant. This would mean the true impact of a 3 billion dollar loss of equity in the horse industry would equate to a 24 billion dollar economic impact to the U.S. economy. It’s like wind chill factor. The temperature is 10 degrees but feels like -20 below. The equity loss is 3 billion but will feel like 24 billion. This would be especially hit home hard in rural economies that horse industry is a major part of overall local economy.
Then I thought I have some questions about trade with foreign countries since the majority of the horse meat consumed by humans is consumed by foreign markets and found the following.
Trade Deficit - The negative difference of money owed in foreign currency to other countries , created by the US importing more goods than it exports or exporting more services that it imports.
With the Nation’s international deficit in goods and services increased to $763.6 billion in 2006 from $716.7 billion in 2005. It seems to be a legitimate question to ask. What affect will the termination of export horses and horse meat have on the U.S. trade deficit ?
The value of U.S. horses sold for processing in 2002 was about $26 million (FATUS(2003)). The big question is what was the horse meat from those horses worth overseas and how much money was brought home to the U.S. by the resulting sales of that meat.
Well I did some figuring of my own. Trust me this is just some rough guessing. Based off the 2002 figure that US horses sold for slaughter in 2002 for $26 million . I came up with the following. If the average horse sold for slaughter that year was worth $500.00, then the total number of horses sold that year would be 52,000. If horses then averaged weighing 1000 lbs., then that would be a total poundage of 52 million lbs. If the yield of meat was 55% then those horses produced 26 million lbs. of meat. If that meat was worth $10.00 a lb. the total value of that meat would be 260 million dollars. If it was worth $15.00 a lb. the total value of that meat would be 390 million dollars. This seems to be a rather large sum of money brought to the U.S. economy and a significant influence on the U.S. trade deficit.
The final question would be who is going to pay for the excess of unwanted horses? I assume the tax payer. For as soon as the banner wavers save the horse from death, they will be swamped with the unwanted horses and financially overwhelmed, which will cause them to pick up their banners again and solicit the government to save the horses from life.
To close, I owe almost everything I have to the horse and cattle industries. I care about horses deeply and am for tighter regulations on the industry to help the horse. However I also realize that hard problems seldom have simple solutions. This article was written to inspire question asking, not to advocate or denounce the horse meat industry.
Horses for Sale in the Western United States
