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Rachel Kosmal McCart is a lifelong horsewoman and the founder of Equine Legal Solutions, PC, an equine law firm based in the Portland, Oregon area. Rachel is a member of the New York, California, Oregon and Washington State bars and is admitted to practice before the U.S. District Court for the District of Oregon and the U.S. District Court for the Central District of California. Rachel currently competes in three-day eventing.

Thursday, May 1, 2008

Equine Economics: Breeding Dollars and Sense

While it is tempting to succumb to a Chicken Little mentality when the horse market takes a dive, a market correction can actually be healthy for the long-term future of the horse industry. Breeders will react to market conditions and breed fewer horses. The horses that are bred will likely be of overall higher quality. If demand for horses remains steady or increases going forward, horses prices will eventually rise in response to the limited supply.

However, most breeders cannot afford to think about supporting the future of the market, and must instead think about supporting themselves. Many smaller breeders are rethinking their breeding strategy, and even whether to breed at all. Here is a basic breeding financial plan to help you evaluate your own plans.

First, look at young horses on classified ad sites such as Dreamhorse.com, and search by the bloodlines you plan to breed. Are representative examples advertised for near or less than your chosen stallion's stud fee? If so, that's a sure sign the market is already saturated with horses bearing the breeding that interests you.

If the available young stock is priced significantly above the stud fee of your chosen stallion, the calculation becomes more complex. Attached is an Excel spreadsheet listing many common costs of breeding, from mare care to vet bills. Note that there are two tabs - one for initial expenses, and one for ongoing expenses. To calculate whether it makes economic sense to breed, complete both sheets of the attached worksheet. If you anticipate not having a particular expense (say, if you already own the broodmare), then you can enter a zero in the appropriate blank. If your total expenses are greater than, equal to, or slightly less than what it would cost to purchase a foal, you are better off not breeding.

Even if buying vs. breeding looks fairly even cost-wise, you still bear the risk that your mare won't become pregnant, won't carry the foal to term, will have foaling complications or that the foal will have health issues. If you breed, you also run the significant risk that the foal will not have the temperament, movement, conformation or color that you desire. When you purchase a foal or young stock, you can select exactly the horse you want. Buying a foal also allows you to avoid ongoing mare care expenses (which of course continue on after a foal is weaned). But, you say you want to witness the miracle of birth? That's what MareStare.com is for!

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