Thursday, February 2, 2012

The Price of a Horse (Especially in THIS economy!!)

There seems to be a lot of hub-bub lately about horse shopping on the interwebs of late. Maybe the economy is truly coming back, so people are ready to try selling the old and bring in the new? Or hopefully just add another horse to the herd! I hate letting go of my friends! Anyways, I thought I would add my own two cents to some of the excellent commentary floating around.

The last two horses I bought, I bought on the East Coast. Why? Not because the horses out there are better (although the breeder’s out there will tell a different story!!).  No, out East, it costs more to feed a horse, more to train a horse, and more to be in the horse world in general compared to the Midwest. But, there are also more horse enthusiasts per capita, which mean more horse breeders, horse trainers, and horse traders. The larger supply of horses means two things for a potential consumer: more possible “candidates” in a smaller geographic area, and more potential bargaining power for the consumer. These two factors make for the potential of a first rate horse at a cut rate price.

My own little Midwest breeding project :)
Not to say that the breeders here are not worth looking at!! On the contrary, some of the local breeders are able to produce absolutely top quality stock, worthy of the highest praise (and price!!). And the Midwest is practically famous for producing diamonds in the rough! If you can find the horse of your dreams locally, you will save lots of money on the gas to get her home and the fret of finding a trustworthy vet who will give you the honest run down of the horses soundness and capabilities. 

Now onto the meat and potatoes of this post: talking about price, and where these magic numbers come from. There are a number of factors-- first and foremost, there are sunk costs. It takes money to keep the mare happy and healthy while she carries the foal. Then there are the costs to keep that foal healthy and happy as he grows up until the time someone buys him, whether that is at age 6 months or 6 years. I had one breeder out East tell me she had nothing in my budget, because she already has that much invested in the horses the day they are born! The longer you own a horse, the more money it will take to recoup your costs. In order to get more money, the horse needs more training or greater accolades. Getting these accomplished takes more money. Sometimes in the long run, its cheaper to part with a horse for less than your asking price, rather than hold onto him another year waiting for someone to come up with a better offer.

Next comes the talent-to-training ratio. A very talented youngster can cost a lot of money. A mediocre horse with a lot of training can cost a lot of money. Put the two together, and you can have a very expensive horse! Who does the training and how long they did it can make a huge difference too. An upper level rider charges a lot of money to sit on a horse, but every second is incredibly valuable, whereas a local professional will get the job done cheaper, but it will take them longer, and it will not carry the "weight" in a national ad that the big time rider would. Also, if the horse has "been in training" for six months but can't canter yet? Or has multiple trainers listed? Raise the red flag!

When it comes to evaluating talent, there are several factors to consider. First and foremost is the horse itself. How does she look? How does she move? Does she seem smart? Does she have that 'spark' of greatness-- The 'Look of the Eagles' as Bruce Davidson calls it? Next, if its available to you, is the pedigree. Too many breeders rely on special stallions and ordinary mares. The mare is the most important part of the equation. Another Bruce Davidson quote, “If you breed a mediocre mare to a great stallion you will get a mediocre foal. If you breed a great mare to a mediocre stallion you will get a great foal … the cream always rises to the top.” If you're not familiar with the in's and out's of a potential candidate's breed, find a friend who is, and have them check it for any "red flags." The best proof is in the pudding-- if there are any full siblings you can get information on, do. If not, look into as many half siblings as possible, from mom and dad. And, of course, age and training of the horse can make a huge difference in evaluating talent. Its a heck of a lot easier to know what you're getting if you're looking at a trained 6 year old compared to a yearling that may or may not be in an "ugly phase" the day you see him.

The final crucial factor is the seller's situation. Off the track thoroughbreds can be very talented, somewhat trained, and absolutely dirt cheap, because all the seller wants is to empty out that stall and bring the next horse in! And, of course, when we're talking about buying a horse in THIS economy, the seller's situation is a pretty huge factor. As I said earlier, every month you own a horse takes money, so when you really need to get rid of a horse, you may have to let it go well below what it should be worth in a Bull market just for the sake of getting rid of it!

This concludes our lesson on horse economics, aka, if you want to make a million dollars in horses, start with 2 million.

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