Breeder Business A Foreign Yen for German Horses

Prices for top German horses are going up – but most of the buyers are from abroad, as domestic riders often lack the sponsorship to afford the best stock.
The Award-winning Characklis.

When Matthias Rath rode the 15-year-old black stallion Totilas into the Aachen dressage arena for the 2015 European Championships this month, the spectators were enthralled. Despite a long injury layoff, the million-dollar horse was still a spectator magnet.

The goal of the German dressage riders earlier was clear – to win the gold medal. Why be modest when you have the best dressage horse in the world?

But the exceptional horse disappointed its fans and Germany, with some critics claiming he was brought back too soon. In the competition, his back legs were off a beat and points were deducted. In the end, the German team finished third, behind the Dutch and British -- a bitter loss.

Days later, his German owners announced that Totilas had a bone edema on his left hind hoof. He would be retired and no longer ride in tournaments. Still, Totilas represents equestrian success like hardly any other horse. In 2010, with Dutch rider Edward Gal in the saddle, the horse won three world championships. The whole world sought the stallion, which was foaled in 2000 in the Netherlands.

In 2010, one of Europe’s top horse breeders and trainers, former German show jumper Paul Schockemöhle, paid an estimated €10 million, or about $11 million, for the horse. The high price was a novelty at the time in the equestrian world.

The prices for top horses are shooting through the roof. Theodor Leuchten, Vice president, German Riders Association

For years, the horse industry had been in crisis. There was an over-supply of horses and many breeders couldn’t cover their costs. Today the sport is a lucrative business in Germany and the world, with prices for the best animals rising ever higher.

“The demand for foals is clearly growing,” said Theodor Leuchten, vice president of the German Riders Association, which represents breeders and riders. “The prices for top horses are shooting through the roof.” Interest from abroad in German horses is skyrocketing.

Video: Matthias Alexander Rath wins the 2014 Grand Prix on Totilas.

Tobias Schult runs a “stallion station” in North Rhine-Westphalia, in the rural municipality of Hünxe. Recently a Spanish couple visited his ranch to check out his horses. They bought a foal from him a year ago, and wanted to place another order, this time for a trained breeding stallion.

In the last year, Mr. Schult’s breeding business accumulated many orders from abroad. “I have even sold horses to Colombia,” he said. The 39-year-old is a passionate rider and took over his father’s farm 10 years ago.  Mostly his father raised pigs and just a few horses on the side. Tobias turned the farm into a professional breeding facility – a classic family operation with his wife, parents and five employees. They take care of eight stallions and 20 mares. About 20 foals are born each year at the 60-hectare farm (about 150 acres).

Mr. Schult has bred 800 horses in the past year. He has even worked with horses for Germany’s Isabell Werth, one of the world’s top dressage riders and a five-time Olympic gold-medal champion.

The up-and-coming stallion Belantis, a 2104 national champion, is from Hünxe. So are other top horses, including Quotenkönig. Mr. Schult is now preparing eight-year-old Feedback for the Grand Prix, the supreme discipline in riding.

Super stallion Totalis with his owners.

 

Yearly revenue for breeders and riders in Germany is €5 million to €6.5 million, estimates the German Riders Association. That’s as much as some DAX-listed companies make. More than 300,000 people earn their living directly or indirectly through horses and equestrian sports. About 700,000 riders are organized in associations.

This month’s European riding championships in Aachen got more attention than usual. Even Ursula von der Leyen, the federal minister of defense, got on a saddle for the opening festivities. The tournament budget was €24 million and 450,000 visitors were expected.

In 2014, 23,097 foals were registered in Germany. Whether they become race, dressage or jumping horses is decided after a few months. But only after three years can the animals be ridden – and thus specialize. The training of a professional animal is lengthy, and the business is accordingly professional and costly. There are now 55,000 breeders in Germany – and in the long term, only pure horse operations such as Tobias Schult’s business can work successfully.

At his farm in Hünxe, he converted old pig enclosures into modern horse stalls. There is now a riding hall, a jumping paddock and a covered lunging area. In one stall area, there are ceiling heaters to keep the animals warm in winter. Mr. Schult has already invested many hundred thousands of euros in the facilities.

“Everything must be more beautiful, better and more exclusive,” he said. That’s necessary if you want customers to spend more money.

Anyone who buys a foal is also buying a great piece of hope – built on good genes from the sire and mare. You also hope that the horse will someday win prizes and its market value will soar. “A horse is a transient product,” said Mr. Schult. “The value rises above all with sporting success.”

Such success is built on victories at national shows and tournaments, and perhaps even on Olympic medals. That is the value that makes a good horse a really expensive one.  It also raises the selling prices for its offspring. The cheapest animals can cost from €8,000, but those are only for recreational use.

“Thirty years ago, there were maybe five people in the world who spent a million marks for a horse,” said Mr. Schockemöhle, co-owner of Totilas. “Today, a million euros is a completely normal price for a top horse.” More exceptional animals can command several millions.

For long-term success, the interplay of genetics, talented riders and constant care must be right. Horse breeding is a highly technological business, and no one counts only on Mother Nature anymore. The days when stallions jumped on mares are mostly past. Only thoroughbreds are still bred naturally. With other types, mares are almost exclusively artificially impregnated, from stallion semen banks.

 

Quelle: Pressebild
Nearly half the foals at the recent auction in Hannover were sent abroad.
(Source: Pressebild)

 

For Mr. Schult, the artificial breeding process is a big part of his business. Behind a wooden sliding door at his farm is an insemination station, equipped with a large leather fake horse. It is similar to a horse vault used in gymnastics. Mr. Schult needs two helpers – one to hold the stallion and the other, the artificial vagina. Up to 15 portions of semen can be collected in a single procedure, which he repeats with his stallions hundreds of times a year.

The fresh semen costs between €800 and €1,200 per portion. Customers in the area bring their mares directly to the insemination station. But about 60 percent of the semen is frozen and mailed to destinations including the United States and Australia.

With his best mares, Mr. Schult also bets on embryo cultivation through surrogates. Though banned for humans in Germany, it has long been used in horse breeding. In this way, a top mare can have up to two to three offspring per year. The procedure costs about €3,500, however, and is only worth doing with the best animals.

In this way, the genes of the star stallion Totilas have been multiplied 250 times. Mr. Schockemöhle has about 4,000 horses on his breeding farm, about 30 kilometers south of Schwerin in Mecklenburg-Vorpommern. Each year, about 700 foals are born there, and 90 percent are sold abroad. His breeding operation searches Europe for the best genetic combinations, with its own animal clinic and 200 workers.

With Totilas, his most expensive horse up to now, he didn’t have much luck on the competition side. “Surely we had hoped for a considerably better sporting career,” he said. “But the horse was prone to injuries.  Still, I am happy to have him.”

Next year he wants to use the miracle stallion for more breeding. Mr. Schockemöhle has charged €8,000 in breeding fees in the past, but now plans to lower the price for the champion's sperm, possibly by half.

The hope that the next Totilas will some day gallop from his farm is great. But it also possible the horse will gallop abroad. At the most recent foal auction of the Hanover association, nearly half were sent to other countries. Germany breeds the best horses, but can’t keep them – as wealthy buyers from the Mideast, Russia and China spend millions for German purebreds.

Even professional German riders may find it hard to ride these top horses, as only those with generous sponsors can get to that level. Effectively, horses bred in Germany are competing against German riders – and winning.

 

Christian Wermke reports from the Handelsblatt Düsseldorf bureau. To contact the author: [email protected]