There’s considerable controversy over whether it’s a good thing or a bad thing for rescues to buy puppy mill breeding stock at auctions. The typical scenarios for these rescue purchases are large auctions in the Midwest, where hundreds of purebred breeder dogs are on sale.
The argument that rescue buying of breeding stock is a good thing is that it saves the animals purchased at auction from a dismal or even torturous life in a puppy mill. The argument that it’s a bad thing is that it funnels the money of animal-welfare donors into the puppy mill industry, because the dogs are being sold by puppy mill operators.
Obviously, anything that helps the puppy mill industry is something we want to avoid. This blog looks at the question of whether rescue purchase of puppy mill breeding stock at auction helps the puppy mill industry or not.
The first thing we need to do is make a distinction between baby puppies (generally 6-8 weeks old) that puppy mills sell to brokers, and the breeding stock used to produce those puppies. The puppies are the “product” of the puppy mill industry, and the profit from sale of puppies is what keeps the industry going. Breeding stock is the means of production for puppy mills. As such, breeding stock, far from representing profit, represents a cost of doing business. This is a crucial distinction. When the market price of baby puppies goes up, puppy mills benefit because they get more money for their product. When the market price of breeding stock goes up, puppy mills lose money because their cost of doing business is higher.
Let’s take the example of a sale of one puppy by a puppy mill operator to a broker for $1000. The puppy mill’s profit on that puppy is $1000 minus the amount that the operator spent to produce the puppy. Part of the cost of producing the puppy is the acquisition cost of the puppy’s parents. If that cost (pro-rated for this individual puppy) represents $30 of the cost to produce the puppy, the puppy mill will have more profit than if the pro-rated cost to acquire the parents was $35.
So when puppy mills have to pay more money for breeding stock, it directly reduces their profits. Lower profit hurts the puppy mill industry because it reduces the incentive for people to become puppy mill operators and encourages current puppy mill operators to get out of the business.
That’s pretty much economics 101, and is non-controversial. Now we need to look at the effect that rescue buying of puppy mill breeding stock at auction has on the average price of breeding stock. If it drives the average price of breeding stock up, then it is hurting the puppy mill industry. If it drives the average price down, it is helping the puppy mill industry. If it has no effect on the average price of breeding stock, then it is neither helping nor hurting the industry.
Rescues compete with puppy mill operators to buy breeding stock at auction. Thus, there is no way that rescue buying of breeding stock at auction can help the puppy mill industry. Rescue buyers are competing with puppy mill operators for the means of production, and that puts upward pressure on puppy mill costs of doing business. Under basic principles of economics – econ 101 again – rescue buying of breeding stock at auction is bad for the puppy mill industry.
If you doubt this, imagine that you are a puppy mill operator and you are at an auction to buy breeding stock. You obviously would prefer not to have to bid against rescuers, because you know they are going to bid up the prices.
Some people argue that the money paid by rescue buyers of breeding stock is going into the pockets of puppy mill operators who are selling dogs at auction, and therefore that money is helping the puppy mill industry. It is true that rescue buying of breeding stock at auction puts money in the pockets of puppy mill operators, but that’s not the same thing as helping the puppy mill industry. Let’s look at how the puppy mill operator can spend that money. First, it might be that the puppy mill operator is going out of business. That’s quite a common reason for selling breeding stock at auction, because business operators do not normally sell their means of production if they plan to continue in business. If that’s the case, the money that goes to the retiring puppy mill operator will not benefit the puppy mill industry at all.
Another way the puppy mill operator might spend the money from the sale of breeding stock is to buy more breeding stock. Maybe the operator sold off less-popular breeds to fund the purchase of breeding stock of more-popular breeds. Here again, rescue purchases of breeding stock are not going to help the industry. The puppy mill operator may make a premium on the dogs he or she sold to rescues at auction – let’s say the operator gets a 10% higher price on the dogs sold, due to rescues bidding up the price. But the puppy mill operator will have to pay 10% more for the new stock that he or she purchases, due to the competitive bidding of rescues. This type of transaction just represents “churn” in the means of production, and again there is no net benefit to the puppy mill industry.
Some critics of rescue buying of breeding stock at auction argue that the entire practice of selling breeding stock to rescues is a fraud, because puppy mills can just hold some puppies back when they want more breeding stock, so they have no need to buy breeder dogs at auction. This argument shows a lack of knowledge about how puppy mill operations work. A typical commercial puppy mill has breeding stock of many different breeds. For example, it might have 35 breeds, with an average of maybe 2 stud dogs and 10 breeder females for each breed — the number of stud dogs is small because not many are needed. Puppy mill operators favor outcrossing, because that produces the largest, healthiest litters. A puppy mill operator is not likely to hold back a dog as a future breeding animal, because that would result in inbreeding that would reduce the number and viability of puppies produced.
A related argument I’ve heard is that some puppy mill operators are breeding dogs specifically to sell to rescues at auction. This is nonsense, because it is not an economically viable model for a business. If a puppy mill operator can sell a registered, purebred, 6-8 week old puppy for $1000 to a broker, why would that operator spend money to house, feed, and provide veterinary care for that animal for 1 or 2 years (the usual minimum age for breeding stock) just to sell it at auction for less than $1000? The people who make this argument have simply not thought through the economics of the issue.
To sum up, rescue buying of breeding stock at auction puts downward pressure on the profits of the puppy mill industry by putting upward pressure on the cost of production. We do not have enough information to know the extent of the effect of this downward pressure on industry profits – it may be minuscule, or it may be substantial. But we do know, just from looking at the issue as one of basic economics, that rescue buying of breeding stock at auction does not help the puppy mill industry.
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