Modern Pegasus: U.S. Thoroughbreds Wow South Korea - Statistical Data Included

AgExporter, July, 2000 by Mary Ponomarenko

Her name, Get Off Flying," refers to her skills as a race horse, not her love of air travel. Nevertheless, this Maryland-born thoroughbred put away her racing shoes and boarded a 747 cargo hold in December 1999, en route to a new life as a first-time mom in South Korea.

She and 42 other mares have left the track to become breeding stock for South Korea's next generation of race horses. They were part of a $450,000 international sale that also included Glide, a stallion.

This was not a first-time purchase, however. The South Koreans have looked to U.S. thoroughbreds to improve their stock since 1997.

Maryland Takes The Lead

The state of Maryland was critical in setting the stage for S&K Trading and Consulting Inc, in Ellicott City Md., and its vice president Jay Bang, to make that first sale, forging a long-term partnership.

"I cannot express how hard Jay and the entire S&K staff has worked, not only to win that first contract from the South Korean government in 1997, but to build the trust and respect of people involved," said Errol Small, director of international marketing with the Maryland Department of Agriculture. "Considering how business slowed during Asia's recession, it is to his credit they bought from us when our competition is so much closer."

According to the Maryland State Department of Agriculture, the total economic impact from that original purchase of horses, including everything from feed, medicine and equipment, has reached an estimated $4 million through 1999.

This sale would never have happened, however, without Maryland's commitment to exporting and its support of exporters like S&K chairman K.W Shin.

It was Shin who recognized the advantage to Korea in buying U.S. thoroughbreds. U.S. horses can arrive ready to race, as Korean and U.S. seasons are the same.

Australian and New Zealand horses, which dominated the marker, might be less expensive, but their animals come in their winter coats and need time to acclimate and get racing-ready.

Long before he got into the South Korean race horse market Shin knew the business was there. South Korea couldn't breed enough horses to meet domestic demand, but they were buying closer to home. Shin knew U.S. thoroughbreds were a better choice, but he still had to convince the Koreans.

"It was not a piece of cake," Bang acknowledges. "Horses from New Zealand and Australia were much cheaper, so we had to sell the importers on our quality It took us eight months."

Bang credits the Maryland Department of Agriculture with helping him make his case. The state used money from FAS' Market Access Program (MAP), obtained through U.S. Livestock Genetics Exports, Inc., to bring a delegation of Korean racehorse owners, breeders and trainers to Maryland's thoroughbred horse farms, to learn first hand about the industry.

"We got the buyers here and they liked what they saw," said Bang. "Certainly, an essential part of this process was the fact that Maryland took advantage of the USDA funding program."

A Challenge From an Old Friend

S&K already had a successful business exporting tools and rugs to Korea. Why get involved with a potential headache like horses?

Bang, who grew up in Korea, dismissed his doubts when a horse-training friend visited the United States.

"He works for the Korea Racing Association (KRA)--the government agency responsible for overseeing the industry," said Bang.

"He said to us, 'You have all these resources in the United States. Why not give it a try?"'

There are, however, big differences between the racing industries in the two countries. At U.S. tracks, the government regulates only betting. In South Korea, the KRA manages the entire industry--although individuals may own horses. It was the KRA that awarded Bang his first $750,000 contract in 1997.

When S&K's first shipment of horses arrived in South Korea, demand for the animals far outnumbered the supply. KRA held a lottery for the horses.

"At the drawing for them," said Bang, "I remember people winning their horse and actually crying for joy."

East Coast Horses Do U.S. Proud

After S&K Trading and Consulting won its contract, Maryland officials began planning the tour. Did it bother the Marylander that KRA requested Kentucky, the Graceland of U.S. horse racing, as a first stop? Small says not.

"When you're dealing with Federal money, the competition is other nations. If any U.S. breeder makes a sale--well, then, the entire industry gains stature."

The next stops were Pennsylvania, New Jersey and Maryland. The buyers were looking for modestly priced horses that could still upgrade Korean thoroughbred genetics. After all, any of them could run six furlongs faster than the 1 minute, 15 second record held by the fastest horse in the KRA.

The sales from auctions across the Mid-Atlantic states benefit breeders from many farms--they looked at over 300 horses before deciding on the select 87 that would fill the 747 cargo hold.

BWI Airport Gets in on the Act

Dr. Virts, Maryland Secretary of Agriculture, fostered the idea of transporting the horses from Baltimore-Washington International airport (BWI). BWI had never dealt with a 747-load of horses before. Maryland captured the airport authority's interest and helped coordinate the effort.