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Arabian Horses in the 1980s

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  • Arabian Horses in the 1980s

    I've been looking into the whole thing that happened in the 1980s when Arabian horses were being bred as an "investment" rather than as useful riding horses (for the most part). Then the tax laws were changed in 1986 and everybody tried to dump their horses for almost nothing. I remembered the market changing, since I boarded at an Arabian breeding farm at the time, but didn't know the particulars.

    Anyhoo, I stumbled on this interesting radio program (from 2002) where some "insiders" from the era talk about their experiences. Scroll down the page about 1/3 of the way - it's the one called Segment 1: "Reaganomics on the Hoof: The Arabian Horse Industry in the 1980s."

    Here's the blurb for it:
    Reaganomics on the Hoof explores how something as remote and impersonal as changes in tax laws can have far reaching, and completely unforeseen, effects on obscure corners of the American cultural landscape. In the early 1980s Arabian horse breeding operations became glamorous tax shelters, and because they only qualified as tax shelters if the animals were constantly reproducing, the numbers of Arabian horses in the country skyrocketed; prices for top horses reached the millions. When the tax law changed in 1986 the industry collapsed. Horses worth tens of thousands of dollars a when they could be written off were, overnight, became walking dog food. The rich got out of the horse industry, the horse people could no longer make a living, and thousands of horses were sold by the pound. Now, more than 15 years later, the industry is just starting to show signs of recovery. Produced by Lizzie Redkey for Talking History (University at Albany).

    It's 20 minutes long, so make a cup of tea and put your feet up.

  • #2
    Sadly it looks as though history might be trying to repeat itself. Despite the market for most horses being in the toilet there are still the elite few that will pay tons of money for a horse they can't or won't even ride (and probably nobody else will either).
    Every mighty oak was once a nut that stood its ground.

    Proud Closet Canterer! Member Riders with Fibromyalgia clique.

    Comment


    • #3
      You may want to pick up a copy of the book Trading Paper by Callie Canberra, it is all about the Arabian industry in the 80's and its crash.
      Every man has a right to his opinion, but no man has a right to be wrong in his facts.
      Bernard M. Baruch

      Comment


      • #4
        my family lived through the 80's crash. It was devastating but unfortunately wouldn't have affected the breed if folks weren't hiding their money there in the first place. The Arabian breed is still trying to recover, wandering lost among the other breeds and trying desperately to find value in our horses.

        I managed to rekindle my parents' farm but not as a breeding operation. They were never big but produced high quality babies that were sought after by knowledgable trainers and owners as great performance horses with excellent minds. Unfortunately, my father was badly injured by a horse and had to quit his very successful blacksmith gig. He also sold Stidham trailers but the economy pulled that out from under him as well.

        I was ten when my parents had to file bankruptcy. They walked away from their farm, their horses and their dreams with the clothes on their backs. I have spent the last 26 years building our farm name back up. I train and teach a heck of a lot more than I will ever breed. Breaks my heart to sell the babies! But it gives me great pride to represent my family's farm.

        Just got back from Scottsdale. Didn't show but had a fantastic time visiting friends. I actually didn't watch much of the show as it's the same old, same old to me. I prefer to watch the warmup rings. Much more educational for a purist trainer like me. I learn a lot about what not to do and what doesn't work. Further justifies my training ideals and program. but I consider myself a little pickle in this big salad.

        I can only hope that those of us out there can keep on keepin' on with our crazy little aye-rabs.

        On a side note, my politically savvy hubby says that it was actually Carter's policies finally gaining speed that crashed the market. Reagan did a lot of good to fix things but like many policies, the effects were not seen until he was long out of office. Now me, I don't trust anyone who wants to run a whole county.

        The best bit of political rhetoric I know is this:
        The goverment cannot give you anything without taking it first from someone else.
        ...don't sh** where you eat...

        Comment


        • #5
          I remember this as a kid in NorCal.

          Now driving through some of the same areas you'll see tiny hobby vineyards planted in every available nook. I don't find dirt and rows of trussed up woody plants aesthetically pleasing. Grapes also take years and years of growing before they start producing fruit. I'm not sure how much wine will come from, say, half an acre that was your front yard.

          Why do this? Some tax thang has given people with little wannabe spreads on very expensive land a way to save.
          The armchair saddler
          Politically Pro-Cat

          Comment


          • #6
            I "lived through" those times as well, but I was merely showing Arabian horses then.

            I still maintain that the bad rep that the Arabian horse has today is a direct result of the market being flooded with those "living art" horses whose minds had been ruined for the halter ring so they'd look like bug-eyed, fire-breathing dragons.

            Horses that had supposedly been purchased for hundreds of thousands of dollars were being dumped and low end auctions for $125 each and being bought by unsuspecting backyard people who found themselves with horses they couldn't handle because they were so freaked out from their halter "training."

            The public began to believe that all Arabians were like this. So sad, when the average Arabian horse is a gentle, willing, friendly and oh-so-smart horse that is a joy to be around.
            Visit Sonesta Farms website at www.sonestafarms.com or our FaceBook page at www.facebook.com/sonestafarms. Also showing & breeding Cavalier King Charles Spaniels.

            Comment

            • Original Poster

              #7
              Thanks to all for the replies. I'm not sure why I find this topic so fascinating, but I do. Maybe it's the confluence of horses, wealth, and economics, I dunno.

              Amwrider, thanks for the book suggestion - I'll definitely look into it. (I always try the library first.)

              Winfield Farm, sorry you had to live through it and for your folks' troubles, but it sounds like you're soldiering on bravely. I think that there will always be people who find the breed appealing, so I don't think there's a real danger of it dying out.

              MVP, I know what you mean about "repurposing" farms, and I agree that vineyards aren't that glorious to look at. They're gaining popularity here, too. BUT I would rather see a little farm made into a vineyard than, say, a subdivision - an all too frequent occurrence IMHO.

              I personally love Arab crosses and hope to own another one some day (had one as a kid). I'm trying to be more knowledgeable about bloodlines this time around, though.

              Comment


              • #8
                it wasn't just the Arabs

                I was a teenager in those days,so had no money to loose
                but the horses that were shipped to the killers,the numbers were enormous...

                I specifially remember the horses sorted by BREED for each full trailer that left...

                a full load of quarter horses,a full load of arabs,a full load of drafts,a full load of ponies and on and on...

                and boxes and boxes of registration papers for the horses left stacked in corners...

                it was the greatest slaughter I had ever seen then or since...

                Tamara in TN
                Production Acres,Pro A Welsh Cobs
                I am one of the last 210,000 remaining full time farmers in America.We feed the others.

                Comment


                • #9
                  Originally posted by winfieldfarm View Post
                  The goverment cannot give you anything without taking it first from someone else.
                  This!

                  I do hope you have a successful and rewarding life breeding and training Arabs.

                  Comment


                  • #10
                    What changed in the tax laws? My dad is an architect and he designed some Arabian barns for one of his clients who was a wealthy art investor. Then the guy just stopped and dumped the horses and we just thought his business went bad.

                    How was a horse a tax shelter in 1980?
                    ==================
                    Somehow my inner ten year old seems to have stolen my chequebook!

                    http://reriderandpony.blogspot.com/

                    Comment

                    • Original Poster

                      #11
                      Originally posted by Chaila View Post
                      What changed in the tax laws? My dad is an architect and he designed some Arabian barns for one of his clients who was a wealthy art investor. Then the guy just stopped and dumped the horses and we just thought his business went bad.

                      How was a horse a tax shelter in 1980?
                      Here's what I found on this link:

                      In the 1980s, Arabians became a popular status symbol and were marketed simlarly to fine art. Some individuals also used horses as a tax shelter. Prices skyrocketed, especially in the United States, with a record-setting public auction price for a mare named NH Love Potion, who sold for $2.55 million in 1984, and the largest syndication in history for an Arabian stallion, Padron, at $11,000,000. The potential for profit led to over-breeding of the Arabian. When the Tax Reform Act of 1986 closed the tax-sheltering "passive investment" loophole, limiting the use of horse farms as tax shelters, the Arabian market was particularly vulnerable due to over-saturation and artificially inflated prices, and it collapsed, forcing many breeders into bankruptcy and sending many purebred Arabians to slaughter. Prices recovered slowly, with many breeders moving away from producing "living art" and towards a horse more suitable for amateur owners and many riding disciplines. By 2003, a survey found that 67% of purebred Arabian horses in America are owned for recreational riding purposes.

                      Wikipedia has an article on the Tax Reform Act of 1986 if you want the particulars.

                      Comment


                      • #12
                        I was boarding at a very nice arabian show barn at the time (I had the only QH in the whole barn). Problem was that folks were taking massive tax writeoffs, and many of them had to pay back taxes if they tried to continue to write off their expenses, and were classified as "hobby horse owners" and not truely into it as a business (i.e., showing a profit in 2 out of 7 years).

                        The trainer got out of training, and changed careers, a new trainer came in and didn't make a go of it, and then the barn was leased out to a dressage trainer, and now it has a reining horse trainer in there.

                        Only one of my former co-boarders at the farm still shows arabians, she moved her horses to other trainers farms, those trainers that did manage to stay in business.
                        There are friends and faces that may be forgotten, but there are horses that never will be. - Andy Adams

                        Comment


                        • #13
                          There was so much more to it than just the tax shelter, there were the sydicates, the trading of one horse to another to inflate the prices...it certainly was used as a tax shelter, but what many of the big farms did was really criminal...if it were stocks and not horses, they would probably be in jail.

                          I met a lot of the Old timers when I lived in Phoenix, heard many many stories about those days- horses selling on ticker tapes, the lavish auctions, the over the top farms that are now used car lots and stripmalls.

                          I think it sad that there was such little regard for the animals. A lot of people got really screwed out of a lot of $ because they were swindled - uneducated, un horsey people who thought they could make a lot of money buying horses, and then the bottom fell out. The listened to a slick sales man...its a story as old as time.

                          There is still an ad that I see every know and again for an Arabian farm - a picture of a horse and it says something to the effect of "ask us how this horse paid our daughters way through college."

                          I don't think the breed will ever "recover" from what happened...its like any big trauma and shock, you never get over, you just get through.

                          I love the breed, I always will- Arabians are smart and sensitive and kind. I spent to morning working with one of the Arabians rescued from the Candia situation here in New Hampshire. She is 12 - she has very little handling, yet in just our second time together she has learned to cross tie, and lunge in one direction. She will not allow me to work on her right side--and I tell her that's okay, we will get there, someday. Her eyes speak of the unthinkable things she has endured in her life, set free on a range in Colorado, shipped cross country in a school bus, starved. Yet just the same, they are big and dark and deep, and she is always thinking, her mind open, her willingness to succeed...with all that I know she has experienced, and probably more, she is kind, she wants to trust me, she tells me that if I am kind to her, and speak softly, she is still willing to work at giving me what I ask. This is what I love about the breed, they are as hearty as the are beautiful. They are as kind as they are tempermental. They are as stoic as they are smart - and above all they are survivors.

                          Comment


                          • #14
                            I own one of those horses! he's now 28, and as the story goes, he stood around for the first 5 years of his life, 1982-1987, and was given/sold to a college kid when the breeder went out of business (or something like that...). He found his way to me, eventually, and has been an amazing horse - well bred, sound, great temperament - all the things we love in Arabs. Hard be believe he was essentially "free" at one point in his life. Thank goodness for college kids who like projects!

                            Comment

                            • Original Poster

                              #15
                              Thanks for the story, MM. Similarly, I was boarding at an Arabian breeding farm when the market collapsed. I remember a couple of things that struck me as very odd at the time. For example, the owner came to my door one Saturday morning (I lived roughly 12 miles from the barn) and asked nicely if I could pay my board a little early that month. I had no idea that their operation was suddenly in such dire straits, and I thought this was most peculiar, but I paid them.

                              I also noticed that the farm owners suddenly started buying back some of the youngstock that they'd recently sold. They mentioned something about fearing that they would be sold to slaughter or offed for insurance money. I just thought they were being eccentric, as I had no idea that the market had just fallen apart.

                              These were good, caring, people with nicer than average horses. I wish to heck I could remember the names of their three stallions that they stood - they were good quality and all of them were ridden and not just shown at halter.

                              Comment


                              • #16
                                It was a horrifying time. Horses were abandoned at farms and the farms sent them to slaughter or to the lowest end auctions you can imagine. I bought several at that time for pennies - including the wonderful black stallion we stood for many years - Fyre One. He was an Aladdinn son out of the Bask mare, Fyre Love. She had sold in foal with Fyre for the highest price for an Arabian mare in history at that time. And he was just abandoned at the farm where he was boarded.

                                When the "investor" owners (mostly doctors who knew NOTHING about horses) learned they could no longer write off the incredible expenses of these horses against their regular income (thus, the tax-shelter aspect) they just walked away from them. They couldn't be sold. They were worthless. A "million dollar" horse was of no value at all overnight.
                                Visit Sonesta Farms website at www.sonestafarms.com or our FaceBook page at www.facebook.com/sonestafarms. Also showing & breeding Cavalier King Charles Spaniels.

                                Comment

                                • Original Poster

                                  #17
                                  Thanks to everyone for sharing stories!

                                  Sonesta, I tried to look at Fyre One on allbreedpedigree, but the photo doesn't work. Can you upload another one?

                                  Comment


                                  • #18
                                    Here you go.
                                    Attached Files
                                    Visit Sonesta Farms website at www.sonestafarms.com or our FaceBook page at www.facebook.com/sonestafarms. Also showing & breeding Cavalier King Charles Spaniels.

                                    Comment

                                    • Original Poster

                                      #19
                                      Thanks - what a pretty boy!

                                      Comment


                                      • #20
                                        Wow he is gorgeous!!

                                        I love arabians! Have had two board with me at different times, one is here now. Both are SO SWEET and so curious and just love people and so steady on the trail!

                                        I had a little Arabian mix, I don't know what she was mixed with, she was given to me, and boy was she an awesome horse! Gave you 200% on the trail, go all day through anything and had very little miles on her when I got her (had a lot though when I gave her to another friend, WITH a signed agreement she is not to be bred, leased, sold or given away, she is to come back to me. I guess it's a lifetime free lease?) and she just loves her to death!
                                        I want a signature but I have nothing original to say except: "STHU and RIDE!!!

                                        Wonderful COTHER's I've met: belleellis, stefffic, snkstacres and janedoe726.

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