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Modern Pegasus: U.S. Thoroughbreds Wow South Korea
By Mary Ponomarenko 
Flying horses leap from mythology into modern day exporting. But these steeds ride in 747s and prove to the world that U.S. race horses are winners.
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 market, 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.
The horses had to be collected, held and screened for diseases. The plane and animals had to be disinfected. Loading and crating could take 7-8 hours for a planeload of horses.
The first planeload went out of New York but BWI was ready for the second and handled the third successfully as well, establishing a regional capability to handle this kind of business in the future.
The Name Stays the Same
Korean owners wept for joy at their good fortune of owning a U.S. thoroughbred, but did they rename their new prize possession?
"No," explains Capp. "Their horses’ names remain as incomprehensible to them as Korean-born horses’ names would be to me," he said. "The international breeders’ associations have agreed that animal names should be like a fingerprint. It’s just a matter of good record keeping."
In the United States, once a name is taken it cannot be used again. Even in the event that owners in two different countries end up giving their horse the same name, they use country designations to differentiate between the horses.
Followup Makes a Difference
After a few horses had begun their new life in Korea, Maryland’s Agriculture Department sponsored a series of seminars for breeders, owners, trainers and jockeys in Korea. The strategy was simple; the Koreans wanted to upgrade their racing industry and we had the technical knowledge to help them do just that.
Tim Capps, of the Maryland Horse Breeders Association, was part of the team of U.S. industry experts, and Bang appreciated his being there.
"The KRA has only 12 stallions, but Tim showed them how to maximize their breeding efforts," he said.
Capps said he was impressed with the hospitality the South Koreans showed him, and was proud to see U.S. thoroughbreds already making a name for themselves in Korea.
"Of the first 40 horses we sent to South Korea, 29 won their first races, many by impressive times," he said.
A One-Track
Country 
Consider how small the venue is: South Korea has only one main track and a little off-track betting. Furthermore, the KRA restricts races to weekends and holidays–only 92 days a year.
Yet they manage to bring in $3.7 billion annually. That’s slightly more than the entire U.S. industry, with all its tracks running full-time, earns in the same 92 days! That’s just how popular the sport is.
Moreover, South Korea’s prizes for winning horses dwarf typical prizes for U.S. races. A $50,000 race would be considered a major competition for owners in the United States, but in South Korea, it’s about average.
Not surprisingly, Koreans are looking to build a second track facility. And you can bet that Marylanders are there providing technical assistance, using state and federal resources, investing now to ensure future sales.
Horse Sellers Find FAS Seoul Mate
Small credits the FAS staff at the American Embassy in Seoul with helping importers find sources of U.S. alfalfa hay and feed pellets for their horses.
He said Philip Shull, the former Agricultural Trade Office in Seoul had also been helpful back in 1997. He and his staff checked registration papers and introduced them to key players in South Korea’s racing industry.
Capp said he appreciated having officials from USDA’s Animal and Plant Health Inspection Service supervise the air transport of the animals. He said their presence not only made a good impression on the Korean Racing Association but also offered peace of mind during the flight.
"At 14,000 feet, if a horse starts to go berserk, it’s not the same situation as in the paddock," said Capp. "You can’t let him run out into a field to calm down–up there we have to use mild tranquilizers."
A Customer’s Welcome Return
During Asia’s economic woes, Bang didn’t hear much from the KRA.
That is why he, Small, Capp and everyone else in this project have been elated that, as Asia’s economy improves, KRA buyers are coming to the United States and returning with mares like "Get Off Flying."
"Who knows? In my lifetime, I may see a Triple Crown winner from South Korea," said Capp.
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The author is an agricultural economist with FAS’ Dairy, Livestock and Poultry Division in Washington, D.C. Tel.: (202) 720-4455; Fax: (202) 720-0617; E-mail: Ponomarenko@fas.usda.gov
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