Your
intentions and desire will be reality in your future.
The Business of Making Money with Horses
By
Don Blazer, taught by Eleanor Blazer
Lesson
Six
Broodmares are risky profit makers
This
lesson is rather short, very blunt, and included only because broodmares are a
major segment of the horse industry.
I
hope that introduction makes you think that I consider broodmares to be a very
risky venture.
Good. I do.
However,
broodmares admittedly can make you a lot of money.
But
they probably won’t.
At
least the odds are they won’t if you take the conventional approach.
If
you have a mare, breed her, and sell the foal, you probably won’t make a
dime. In fact, the vast majority of the
time, you’ll lose money. That’s a
fact. Sure, I know all the stories about
all the big breeding farms which sell yearlings for hundreds of thousands, even
millions of dollars every year. And
those stories are correct. However,
that’s exactly why you won’t make money.
You can’t compete with the big farms, and it takes a big farm to run a
conventional breeding program.
I’m
fully aware that 99.44 per cent of the people in the horse business think
broodmares are a gold mine. Well, some
of them are, but unless you are already very wealthy, the chances are you’ll
never own the gold mine.
Great
mares are worth a ton of money. And the
return on investment can be phenomenal.
But they are few and far between.
Miss
Jelly Roll, dam of the Quarter Horse, Pie In The Sky,
(winner of the All American Futurity and an outstanding sire) was virtually
given away at an early age.
As
the story goes, Miss Jelly Roll was sold as part of a package. Harriet Peckham
wanted to buy a particular mare, and in order to get her, she had to take Miss
Jelly Roll too. The price quoted was for
two mares, and the seller would not change the price or the package.
Ms.
Peckham decided the one mare was worth the full
price, and Miss Jelly Roll could come along as a freebie.
After
producing Pie In The Sky, Miss Jelly Roll was sold for
a reported $1,000,000. Now that’s making
money with a broodmare.
But
it’s not the conventional approach.
The
conventional approach is to breed Miss Jelly Roll and sell her foals.
At
a cost of $1 million, Miss Jelly Roll would have had to produce at least five
foals which would have sold for a minimum of $250,000 each at the age of one
year before the owner would get close to breaking even, let alone making money. Now if you do get five foals to sell as
yearlings, it takes no less than seven years of maintenance, insurance,
breeding fees, etc. And as of this
writing, Miss Jelly Roll has not been a profit producer and never will be, in
the conventional sense.
Most of the time in life we have to learn by experience. We touch something hot, it burns, and we know
better the next time. Sometimes, as I
have learned, you touch something hot a second time before you get the message. I’ve lost money on broodmares, not once, not
twice, but several times.
Please,
let a word to the wise (that’s you) be sufficient. In the horse business, there are some truths
which should not be ignored. No hoof, no
horse, is one. Another is: you can’t buy
great broodmares, you have to make them.
No
matter the breed, no matter the work, a mare must be proven in order to be
considered great. Only great mares
produce big profits for their owners, and owners don’t sell the gold mine.
A
mare can be proven in two ways. If she
is to continue to bring profits, she must ultimately pass both tests.
First,
she must perform. It doesn’t matter
whether she is a halter horse, pleasure horse, or race horse. She must perform and win.
Winning
makes her valuable. It gives her that
important potential need to be a producer.
And remember, as always, it is the potential and nothing else which
makes you money.
Her
second test is as a producer. She must
produce winners in her field if her potential is to remain strong and
profitable. If she fails in either area,
she fails as a profit maker for you.
Only
a small percentage of mares are proven.
The others are already losers, and will be failures as profit makers for
the remainder of their lives. (There is
always some mare, somewhere who proves the exception. But you won’t make a living looking for
exceptions.) Remember the catalog page
you must develop? By now, you should
know a bad catalog page means little profit potential for you.
If
you’ve been in the horse business for one year, then you’ve heard someone,
somewhere, say, “If she can’t perform, we can always breed her.” In early lessons I suggested people buy young
fillies with that thought in mind, because it is that thought which will get
your filly sold if she fails on potential.
Someone, thankfully, will think they can breed her and make a profit on
the babies. By the time you get done
with this lesson, I hope you are not that silly.
Most
mares don’t achieve a winning record.
Without a winning record, they don’t have potential and can’t produce
profits for you.
The
theory of selective breeding says: breed
the best to the best to get the best.
Everyone knows it’s true, but most horse owners ignore it.
A
mare may not show well nor race well, but still her owners go right ahead and
try to breed her and sell the foals for a profit. But since she isn’t a great mare by the first
test—performance—she won’t be approved for breeding by the owners of the best
stallions or her owner won’t risk a high breeding fee.
So
they breed a mare whose record indicates she should never be bred, and they
usually breed her to something which should be a gelding. They then stand around and wonder why no one
wants to buy the foal. (You wouldn’t
purchase such a horse because the catalog sheet would show no potential.)
If
the owner attempts to show the offspring as a performance horse, the chances of
success are slim and none. The expenses
are going to be high, the training time is going to be long, and the offers to
buy are going to be few. Less than the
best, bred to less than the best, usually results in a less than the best
performance horse.
The
cycle is vicious and always a financial loser.
The
rule: don’t breed mares which don’t have proven potential. They must be winners in their field.
If
you can’t accept this rule without more proof, examine the results from any
recognized sale. Prove it for yourself
by looking at the catalog sheet of every horse, and see, and believe, that the
produce of mares without potential don’t sell for
enough to cover the cost of breeding and maintaining the mare, let alone the
costs of raising the foal and the expense of selling at auction.
If
that is not enough proof, go ahead and touch something hot. After the burn heals, read the remainder of
the lesson.
If
you can, sell any mare you have which does not have proven potential. You will lose money on her, but it is best to
cut your losses now so you can invest in a mare with potential.
A
mare with potential is a mare which has some kind of record. Either she was a winner herself at some
endeavor, or she has produced winners.
If
she hasn’t done either of those things, you won’t make money breeding her and
selling the foals. Buyers know the rule
of breeding the best to best to get the best.
And you know it too.
Buyers
will pay big money for obvious potential, and that is all they will pay
for. They will not pay for the offspring
of a mare which cannot win, or has not produced winners.
Check
the results of any broodmare sale, and you will find well-bred mares without a
record selling for $3,000 and less.
Their foals will most often bring much less than the stallion service
fee.
There
are two ways to get mares with potential to make a profit.
You
can make the mare yourself, by showing or racing her, or you can search for a
bargain.
Making
the mare yourself can cost a fortune, and often take years. If you enjoy showing or racing, and that is
what you wish to do, fine. Just keep in
mind that you are having a good time, and have chosen the long, hard road.
I
hope it pays before you are too old to enjoy the final financial rewards.
Personally,
I prefer the easy route. Find a bargain.
Finding
a bargain doesn’t require a lot of work, but it does take patience; as you’ve
been told, all that glitters is not gold.
The
bargain mare must have a minimum of two things going for her.
First,
she must have a proven record as a winner.
A good mare for profit must have national association points in some
competition. If you’ve selected a
particular breed, contact the association for information on awards. Make a catalog sheet.
In
Quarter Horse racing, for example, a mare with high profit potential as a
broodmare will have earned a Triple A rating or a speed index of 90 or better
as a race horse. She will be a
winner. At the very finest Quarter Horse
sales, about one third of the horses for sale will have been produced by
Of
course, you don’t just buy top mares at bargain prices every day. You have to look for them, and when you find
one, she must meet another requirement.
She
must have at least two foals on the ground which are
not yet old enough to have proven themselves.
You
are seeking a profit, and you are selling potential. The two foals on the ground will do two things
to help you make money.
Her
two foals prove she can get in foal and carry to term. She has proven potential to produce more
foals.
Secondly,
those two foals are potential winners.
And that is an idea you must expand upon if you want to make money with
broodmares. You must use their potential
as a selling tool to maximize your profit.
When
you find a mare which meets the two requirements, and you can purchase her at a
bargain price, you are in a position to make a profit with broodmares.
But
if you are smart, you won’t take the conventional route. You won’t be selling the mare’s foals to
make a profit; you are going to sell the mare.
You
are going to sell potential.
Keep
in mind it was not Miss Jelly Roll’s foals which sold for $1 million, it was
Miss Jelly Roll.
It
is not the produce of the good mare which will make you money, but her
potential to produce.
Once
you have a mare with potential, you have several approaches to profit.
You
can work to resell the mare immediately for a gain.
This
is the easiest and surest way to make a profit, and it only requires that you
let the market know you have what it wants.
You can advertise the mare in selected publications, or call directly on
prospective buyers, or enter the mare in a public sale.
Double
the original price of your mare, add in the costs of entering the sale and some
padding for expenses while at the sale, (even if you don’t go to a sale, that
is the way to set a sale price) and with some sales effort on your part, a
buyer will be happy to pay you handsomely.
Remember, mares which pass the test
are in demand, so you are in the driver’s seat.
Present the mare to possible buyers with confidence. Be sure you have your catalog sheet handy as
your primary selling tool, and don’t forget the potential of her yet unproven
offspring.
If
you want more than a 100 per cent return on your investment, get the mare in
foal to the most popular stallion you can afford. Note: I did not say the best stallion
available, I said, “the most popular”.
Just
about everyone in the horse industry thinks he or she knows about bloodlines
and genetic crosses. Few do. Don’t try to be a breeding genius. Go with the trend. You are breeding the mare to make money, not
produce great foals. When a particular
bloodline is hot, take advantage of it.
Sell the market what it wants, rather than what you think is good; then
you’ll make money.
The
most popular stallion in your market area should be easy to locate. He’s the one producing the winners in the
same field where your broodmare shows her potential.
You
should be able to sell the mare in foal to a popular stallion easily for at
least triple her original cost, plus expenses and the stallion service
fee. Don’t be afraid to ask a good price
for the mare. If she has the potential,
there is a buyer looking for her.
There
are no buyers looking for cheap mares without potential.
Finally,
you can take the risky, long-term approach and pray for big profits.
Breed
the mare to the most popular stallion you can afford, and do it for the next
several years, all the while hoping one or both of her first two foals prove
they can win. If one of them does win
big, you’ll have to beat buyers away from your door.
If
good fortune smiles on you (and that’s the part I don’t like about
broodmares—waiting for good fortune to smile), you’ve got a money factory.
If
pure luck misses you, then you can probably still get out with only a small
loss if you sell the mare and her foals as quickly as possible. Once it is a fact the mare is not producing
winners, her price will drop substantially.
Do
not hold a mare longer than four years.
If she hasn’t produced a big winner from her first three foals, it won’t
matter much what she does later on. The
horse industry is fickle and can’t forgive failures. So even if the mare finally does produce, her
value will be stifled by her earlier lackluster performers.
The
only people I know making big profits breeding mares and selling foals are the
extremely wealthy who can afford to breed the very best to the very best. And while they report their success stories,
I’m positive none announce publicly the far greater number of losses.
A
very unfortunate and unpleasant fact about broodmares and foals is that the
fatality rate among young horses is extremely high. Sad, tragic stories are very common.
You
can make money with a broodmare.
But
the only sure way to enjoy profits is to sell the mare and her potential.
Forget
selling her foals. As you should know by
now from your study of sale catalogs and results, you can buy someone else’s
weanlings and yearlings cheaper than you can raise them.
And
you’ve already learned how to make money with weanlings and yearlings.
Assignment:
Refer to this
page:
http://www.horsecoursesonline.com/college/money/lesson_six_broodmares.pdf
This page
shows the catalog sheets for two broodmares that were bred to Lazy Loper. They were sold at the 2013 AQHA World Show Sale in
the fall of 2013.
Your assignment
is to review the catalog pages and determine which mare probably brought the
most money and why.
Send your
report to elblazer@horsecoursesonline.com. Be sure to include your full name and email
address on the document.