Breeders' association executive: 'We think we've seen the bottom'

Friday, May 1, 2015

By John I. Carney

Staff Writer

The last decade has been difficult for the Tennessee Walking Horse industry, but the acting executive director of the Tennessee Walking Horse Breeders' and Exhibitors' Association sees signs of hope.

"We think we've seen the bottom," Walter Chism told the Tribune.

Last year, after years of decline, the Lewisburg-based TWHBEA saw 174 more mares bred than the previous year. Chism calls that a "leading economic indicator for the horse industry," and so any increase is seen as a positive.

Foal registrations through March of this year are up 7.9 percent compared to the same period in 2014, from 774 last year to 983 this year.

The not-for-profit organization itself has stabilized its finances after years of losses, and expects to show about $14,000 in net revenue when the final report for 2014 comes in soon. That compares to losses in 2010, 2011, 2012 and a six-figure loss in 2013.

"Financially, we're stable," said Chism. He said the group has no long-term debt and "very little" short-term debt. He said the financial turnaround was made possible by a combination of revenue increases and cost-cutting.

The most significant cost reduction, said Chism, was outsourcing production of the Voice magazine. TWHBEA had been losing $130,000 per year on the magazine, he said, and now gets 50 percent of the profit from it.

Increased revenue has come from a redistribution of revenue from Tennessee Walking Horse specialty license tags. In the past, Tennessee Arts Commission got 90 percent of the revenue from those tags, said Chism, while Tennessee Department of Transportation got 10 percent. Starting last year, TWHBEA now gets 50 percent of the revenue, with the arts commission receiving 40 percent and TDOT still receiving 10 percent. Chism said TWHBEA will receive about $60,000 a year from the tags.

In a report to TWHBEA members through the association's magazine, Chism wrote that some of the legal issues that have plagued the horse industry appear to be changing as well.

In February, the federal Fifth Circuit Court of Appeals disagreed with a district court in Texas and ruled against mandatory penalties related to the Horse Protection Act. Those penalties would have given exhibitors lifetime suspensions if they received three HPA violations. Since the industry claims that some of the inspections on which those penalties were based were subjective, the industry believed that that penalty was unfair. The court agreed with the idea that the penalties were subjective and ruled that they were an overreach of the U.S. Department of Agriculture's regulatory authority.

When it comes to objective inspections, Chism wrote to his members that the industry has received some validation.

"USDA, via the nearly 10-year-old swabbing program, has disproved the argument that horses are shown with blistering/caustic agents to achieve the 'high-stepping' gait. The swabs have been tested, using equipment sensitive to parts per billion, for foreign substances and USDA has never reported one blistering/caustic agent. Of the foreign substances that have been reported, none have risen to the level of prosecution or suspension."

Chism reported to his membership that the 113th Congress adjourned without taking any action on the PAST (Prevent All Soring Tactics) Act, which he said would have had a dramatically negative effect on the Tennessee Walking Horse industry. That act, if it had passed, would have banned so-called "action devices," which would have dramatically affected the training and showing of high-stepping performance class horses, which are the primary spectator draw for the walking horse industry. Horse trainers differ with animal-rights groups about whether those devices are acceptable.

The author of the PAST Act, U.S. Rep. Ed Whitfield of Kentucky, is being investigated for ethics violations because his wife is a lobbyist who works for the Humane Society of the United States, which was a heavy supporter of the bill.

Although there are some signs of hope for the industry, the numbers have fallen so far over the past decade that it could be a long, slow climb back.

Chism says the industry's tumble has taken place since the 2006 Tennessee Walking Horse National Celebration, when the World Grand Championship class was not held.

"Every year since then," said Chism, "year over year, has been down -- until this last year, and this year."

A graph prepared by Chism shows the numbers. Mares bred, for example fell from 26,148 in 2004 to 5,443 in 2013. Registrations fell from 15,304 in 2004 to 3,942 in 2012, before rebounding slightly to 4,080 in 2013. Transfers of horses fell from 17,548 to 5,667 in that same time period.

TWHBEA memberships fell from 17,872 in 2004 to 7,189 in 2013.

At the same time, the economy has hit all horse breeds.

"You only have horses if you love them and can afford them," said Chism. "A cold in the economy causes pneumonia in the horse industry."

TWHBEA, of course, registers both the high-stepping show horses and pleasure horses as well, and promotes all aspects of the breed.

"Both disciplines are an important ingredient to the success of the Tennessee Walking Horse," wrote Chism, "and each is dependent on the other. The show horse prospects generate most of the revenue, but there has to be a market for horses that are not best suited for the show ring. Unlike some breeds, there is a large secondary market for smooth-riding gentle horses."

And yet, Chism told the Tribune that the show horse is critical to the breed's success.

"The padded show horse is legal," he said; "soring is not, and hasn't been for over 45 years, but if you can convince people that the two are the same; you can diminish a legal activity that you personally don't like. The padded show horse has been the economic engine for the Tennessee Walking Horse. If you can destroy the show horse, you eliminate most of the demand. Less demand, fewer horses sold, fewer horses bred, fewer horse farms and the ripple effect extends to every facet of the economy, including jobs lost."

Chism served as president of TWHBEA in 1991-92. He was named acting executive director in February. He and his family have a long history in the horse industry. At Chism Trail Farm between Franklin and Murfreesboro, they raised Black Vengeance, which won aged stallion class honors at the 2000 and 2001 Celebrations. They owned and raised San Juan, which won the 2005 show pleasure mares and geldings world grand championship.

The farm also raised Concealed Weapon, and produced Pusher's Doing Time, a stallion that has produced six world champions, including 2002 Tennessee Walking Horse World Grand Champion Out On Parole.