European Union ban threatens US horse slaughter pipeline

John Holland, the president of the Equine Welfare Alliance, examines possible scenarios following the European Union’s ban affecting horsemeat shipments from Mexico. He predicts short-term instability, but believes the US market could not hope for a better set of circumstances to kick on and put the slaughter trade behind it.

The US horse industry was hit with the news this week that it would no longer be able to dump its excess horses to slaughter in Mexico.

Effective from January 15 next year, the horse slaughter plants in Mexico that formerly met European Union (EU) operating standards will no longer be allowed to slaughter horses for shipment to that market.

Additionally, on December 10, the US Congress passed a continuing spending resolution that extends the prohibition on slaughter for human consumption within the US through the 2015 fiscal year.

US horse slaughter plants were closed in 2007, but the number of US horses slaughtered for meat did not drop. Rather than traveling to domestic slaughter houses, shipments of horses headed over the borders to slaughter in Canada and Mexico.

horses-slaughtered-by-countryWarnings surfaced at the end of November that the EU was going to shut off the import of horsemeat from Mexico and perhaps Canada, over issues of food safety. The warnings were followed on December 10 by the announcement that the EU will no longer accept Mexican horsemeat from animals killed after January 15.

The ban becomes effective shortly after the Christmas-New Year week in which exports are usually negligible, potentially minimizing the number of remaining horses that will go to Mexico.

The EU issued the ban after Mexico failed to meet long-standing EU food safety standards, stemming largely from the fact that the US has no system for tracing horses or the drugs they have been administered.

The magnitude of the impact

The EU’s Food and Veterinary Office (FVO) audit that triggered the ban estimated that 87 percent of horses slaughtered in the EU-licensed Mexican horse slaughter plants are US horses. US Department of Agriculture (USDA) export figures indicate that 66.9 percent (102,254) of all US horses sent to slaughter in 2013 went to Mexico; twice as many as went to Canada. A similar ban is expected on Canadian horsemeat in the coming months.

In addition to food safety issues, the audit found that the transport of the horses to slaughter did not meet EU humane treatment standards.

The US portion of the trip endured by these horses is supposed to be monitored by the USDA Animal and Plant Health Inspection Service (APHIS). Records show that horses have been routinely rejected at the border by Mexican authorities for reasons ranging from disease to lameness and blindness.

After a decade of false starts and stops, the reality of the decision came as a shock. The impact has yet to ripple down to those associated with the pipeline, much less to the businesses and auctions where the horses originate and are aggregated.

To be clear, Mexico will still be able to accept and slaughter US horses. Although the EU is its main customer, a portion of their horsemeat goes to Russia and other countries.

Curiously, Russia banned Mexican horsemeat on August 4, 2013, and only reinstated it on August 22, 2014.

Since Russia reinstated Mexican horsemeat imports, it has imported only about 6.6 percent of the horsemeat exports of the EU-approved plants in Mexico. It seems unrealistic to expect Russia to absorb the horsemeat that the EU will no longer accept.

Another possible alternative is the many small regional horse slaughter plants in Mexico. These crude facilities slaughter horses for domestic consumption, but their individual throughputs are low. These plants have almost no safeguards, and usually slaughter local horses; however they do not pay enough per horse to be an attractive long-term alternative to the EU plants.

The suddenness of the announcement has led many on both sides of the slaughter issue to ponder what will happen to the horses caught in the pipeline and how the US horse industry will react to this change.

Factors driving the low-end horse market and recent trends in horse breeding, as documented in the Equine Welfare Alliance (EWA) annual Equine Welfare Report, suggest that while there may be temporary negative impacts, the decision comes at an opportune time.

The factors producing this opportunity include breeding trends, fuel prices and new land use policy.

Breeding trends

The breeding of US horses has been in steep decline since 2005, with some breeds down 75 percent, and all breeds off at least 50 percent from their ten-year highs.

Before the EU announcement, the Equine Welfare Alliance was seeing evidence that low-end horse prices were at last recovering and anticipated that breeding was poised to begin increasing in the years ahead, so the timing is almost perfect. total-new-registrations

Earlier research found that equine welfare and the market for low-end horses are most dependent on the price of hay, and considerably less dependent on the state of the economy (as measured by unemployment). This explains why breeding did not recover even as the broader economy lumbered upward. The high hay prices in turn can be attributed to a combination of weather and fuel costs in the short term and land use policy in the long term.

Because of persistent drought and past land use policy, hay prices in many western states have been on a decade-long upward trajectory far beyond the consumer price index or other indicators. The tremendous impact of this trend can be seen clearly in data from Colorado.

Weather, as it impacts hay production, is the one factor that is likely to remain problematic. Much of the southwestern US has been hit by persistent drought, and predictions are that this will continue to be the pattern due to climate change.

Hay production and land use policy

The US maintained subsidies for ethanol production for almost 30 years, but production was insignificant. After 2005, the price of gasoline reached a point where ethanol was economically attractive and it began to be used as an additive at a greatly increased rate. The demand for corn to produce this ethanol skyrocketed, causing land to be taken out of hay production and put into corn production. This put upward pressure on hay prices.

abuse-hay-pricesTwo things, however, have dramatically improved this trajectory in the past two years. First, in 2011 Congress removed the ethanol subsidy and took down tariffs on the import of sugar cane that competes with domestic corn for the ethanol market. Secondly, the price of crude oil fell drastically as domestic production increased and natural gas began to infringe on many oil markets.

As a result of these changes, the production of hay and alfalfa has been increasing since 2012 and will in all probability continue to increase in the next few years as land is taken out of corn and put back into hay production. With more production, there will be downward pressure on hay prices, making horse keeping more affordable, and increasing the demand for pleasure horses.

After a decade of decreasing foal production, there should be a pent up demand for pleasure horses as they once again become affordable.

Why there are excess horses

In a normal market economy, supply balances with demand. No manufacturer will produce more of a product than the market wants at a workable price. So why is the horse industry different?

To understand why we produce excess horses, one must understand the channels through which horses flow to slaughter. Most slaughter horses are sport horses at the end of a very short career (3 to 5 years old). These horses were bred to meet the demands of the racing and rodeo venues, and not the market for long-time horse ownership.

ethanolThe demand for sport horses is determined by wagering revenues or ticket sales, not the cost of keeping them. The demand for recreational horses, on the other hand, is set largely by the cost of horse keeping, most notably the price of hay. Add to this the effect of speculative (lotto) breeding, and the result is a regular supply of excess horses.

While a privately owned horse may be sold on Craigslist or through a classified ad, these former sport horses are usually consigned to auctions where they are run through as “loose horses”, meaning they are shown without riders. Bidders get no chance to see if the horse is even saddle trained. So even when there is a market for them, many horses have no chance to reach it.

The auctions themselves have become an anachronism, and the fact that they are commonly operated by the Amish assures they will remain so. The impact of the ban will fall almost entirely on this handful of auctions. Low-end horse prices will fall, and the sellers will need to rethink their strategy for getting rid of them. With any luck, entrepreneurs will gravitate to this opportunity to pick up inexpensive horses, and sell them into the recreational and show markets.

hay-alfalfa2It must be realized that all of these factors are relatively smooth and gradual whereas the closing of the EU market to US horses will be abrupt. In complex systems like the horse market, abrupt changes will undoubtedly cause significant short-term instability, but as bumpy as the road ahead may be, we could not ask for a better set of circumstances under which to endure it.

23 thoughts on “European Union ban threatens US horse slaughter pipeline

  • December 14, 2014 at 3:16 am
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    We’ve worked so long to see this happen, truly wonderful news! Thanks John for laying it out so well.

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  • December 14, 2014 at 6:17 am
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    Thank you John Holland for your long commitment to exposing and ending the atrocity that is commercial horse slaughter in North America. Your efforts and those of Victoria McCullough — and so many other committed advocates — are finally enabling the hope that many never thought that we’d see in the decades-long effort to ban this exceptionally cruel industry.
    Horse welfare advocates see this ‘bumpy road’ ahead and we will be active in securing needy/at-risk horses. I welcome the “righting’ of market forces: putting the lid on the hellish ‘garbage can’ known as commercial horse slaughter, and seeing a positive change in equine breeding, AQHA be damned. Bring it on.

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    • January 14, 2015 at 8:22 am
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      Amen things are going to get even better for horses and those who love and care for them******

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  • December 14, 2014 at 4:08 pm
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    Thanks, John for getting all this important info out there! I am SO happy that this is happening. It is long overdue!

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  • December 14, 2014 at 6:04 pm
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    So true Marilyn and Kathryn. All of us wondered, at one time or another, if we were just charging windmills. This week has brought me to think back over all the wonderful people who have fought with us over the years. Many great sayings come to mind, but this one is perhaps uppermost in my mind;

    First they ignore you, then they laugh at you, then they fight you, then you win. – Mahatma Gandhi

    We were up against AQHA, AVMA and a host of other powerhouses. All we really had on our side was the truth…at least until Victoria came along 🙂

    John

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  • December 16, 2014 at 5:02 am
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    Many thanks for this excellent report, John. This is a great Christmas gift to horses and to advocates. Now to stop horse slaughter in Canada and save our wild horses from extinction.

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  • December 16, 2014 at 12:11 pm
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    Glad EU banned the Mexican import of horse flesh, but hope that it will also ban that from Canada. This is desperately needed. Well documented report, John!

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  • December 16, 2014 at 4:51 pm
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    Thanks folks. I truly believe this is going to be the Christmas I will always remember. We are watching the numbers going to Mexico and will let everyone know what happens. Canada is next!

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    • December 17, 2014 at 2:18 pm
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      Canada is next!
      Merry Christmas!

      Libby Bender
      Boston, MA

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  • December 17, 2014 at 2:32 am
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    I wonder as there are 50,000 horses being held in the U.S. how these horses will be affected. The auctions will not be selling them to Canadian and Mexican slaughterhouses so there will be fewer sold at auction. It is unlikely they will be returned to the wild as the ranchers control the public grazing lands.
    There will have to be a huge number of folks able to rescue and adopt, or… what?
    I feel without this highway to the slaughterhouses these captive horses are in danger from a government that has shown no mercy…
    50,000 captive horses

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    • December 18, 2014 at 8:12 am
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      I assume you are talking about the wild horses and burros that the BLM is holding. We all know that the BLM is generating a financial snowball with every intention of using it as justification for eradicating these equines. This was exposed a few years ago when their planning meetings were FOIAed. Some believe they will now attempt to euthanize them, but that could cause a tremendous fecal storm in the media. I wish I could tell you not to worry, but we do.

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  • December 17, 2014 at 5:32 am
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    Confusing to me is why the EU considers American horses ok if slaughtered in Canada but not ok if slaughtered in Mexico. What’s the difference besides there being no difference? Interesting… Great article! Thanks for your dedicated service to our horses. Have a very merry Christmas.

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    • December 18, 2014 at 8:16 am
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      Hi Suzanne,

      I am told that it isn’t possible for the EU to simply make one proclamation to cover multiple relationships. The trade with each country must be handled separately, and it is a very complex process. In the end, the same issues are also present with horses from counties in South America that do not even use our horses.

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  • December 17, 2014 at 7:31 am
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    Again, thank you John for your article. It brings light on a subject many horse people do not want to think about. It is about time the various breed associations start dealing with the facts. Just about all the breed associations supported slaughter rather than dealing with the issue at hand. As horse clubs and associations, there needs to develop some type of means to connect horses to those people who are looking for horses. Right now we have humane societies and rescues trying to save as many horses as possible. Small animal humane societies many times will move animals to other rescues to enhance adoption rates. To my knowledge there is not such an avenue for our equines friends. The breed associations are complaining about low registrations numbers as well membership. This is an opportunity for all breed associations to get involved and let gaps offer a registration for those rescue horses. For the most part, an Arabian horse, pure or part-bred may show the characteristics. Our Arabian club in Illinois has been trying to scout the auctions for Arabian horses. Its about time for everyone to step up to the plate and help the horses for they are in this position thru no fault of their own. We owe it to them. Again, thank you John for this information.

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    • December 18, 2014 at 8:23 am
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      Hi Gail,
      I agree completely about the breed associations. They will no longer be able to move these horses through the auctions at any price, so they MUST work on ways to get the horses into the markets where they are wanted. Slaughter represents less than 2% of the US horse population per year, they are just in the wrong market venues.

      I think that operations like Fleet of Angels can have a big part to play, but we all know we can’t rescue our way out of this. We somehow must make the markets work.

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  • December 17, 2014 at 2:15 pm
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    Another great one, John. Always so well researched and referenced! Outstanding!

    Maybe it’s happening. Maybe we will win this battle yet – without big bucks, lobbyists, or anything but our love for horses and the TRUTH!

    Keep us informed. And thanks again for all you have contributed to this moment.

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  • December 22, 2014 at 5:41 am
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    Thank you for all of your hard work on this John Holland! As usual all the facts, nothing but the facts! 🙂

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    • December 23, 2014 at 4:24 pm
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      Hi Lucille,
      Great to hear from you and Suzanne. It has been a while. Actually, the article was not hard because I gave a talk at the IEC in September on exactly the fact that timing was perfect for ending slaughter.
      The horse industry is full of opinions, but usually short on facts. Instead, people start off by saying something like “I have been showing horses for 30 years and I can tell you….” That is followed by claims to truths that would not be revealed by a thousand years of showing horses. I myself had a lot of opinions in the early years that turned out to be less than completely founded. I really love getting in new data, because it whispers the truth to you, whether you believe it or not.

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  • January 14, 2015 at 8:31 am
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    Thank you so much John Holland, as the dear ones have no voice to protest, there seems to be greater & greater numbers even on internet, I wish that your work was already done, and all horses were safe from abuse of slaughter, round ups and other abuses……

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  • January 24, 2015 at 5:29 pm
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    It’s now January 23rd…. I understand there’s Been NO decrease in the number of slaughter rigs to Presidio. Since the EU accounted for more than 80% of horsemeat from Mexico, we should have seen a major difference by now……
    Seems there may not really be a ban!…..

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  • February 18, 2015 at 11:14 am
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    Yes cause all the worlds problems are over. NO, now everyone who has a old horse or unwanted or dangerous horse will not just have to shoot em in the head and take them to the dump. Great news

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    • March 8, 2015 at 1:34 pm
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      Yes, it is great news. Of course, anyone who cares about a horse of any age would have a veterinarian put them down without pain of fear – yes, it’s costs money, but what does one expect when they take on the care of ANY animal. Caring for cats and dogs ain’t free either. However, it’s the owners responsibility to take care of their animals at the end of their lives too.

      Still, a shot in the head – if PROPERLY done, because horses are not easy to kill – is a million times better than the trip to the slaughter plant and the worst death a horse could possible suffer.

      I take it you know nothing about horses or that US horses are not bred for slaughter so veterinary drugs that are banned for use in food animals are regularly used on them. The are NOT safe for humans to eat. Get it?

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  • July 12, 2016 at 8:45 am
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    This is an amazingly well researched article. There’s so much hyperbole and politics involved in this issue, it’s nice to read something that actually has research and sources. Well done.

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