Determining Appropriate Stud Fee Expense

[austique]

Okay I'm a bit confused by this and I'm trying to learn, so here goes... say you have two mares who are half sisters out of a stakes winning dam who has produced nothing of note.

Mare 1 is by a stallion who stands for $3,500 with limited success and no daughters of note to speak of. She is unraced and her first foal is by a stallion who stood for I believe $50,000 last year.

Mare 2 is by a stallion who stands for around $40,000 and is a proven sire of a top stallion and several nice mares. She is a winner of one race and has produced 2 winners (one stakes placed...in Panama). Most of her foals have been by the half sister's sire (owned by the breeder of both mares). Her greatest stud fee expense was around $20,000.

So I guess my question is, is mare 2 equally worthy of the stud fee put into mare 1? If not why? I'm just trying to get a feel for this and I know there are some knowledable folks that can help me. I'm math oriented, so if ya gots a formula bust it out!

[LSB]

Oh austique, you know the answer is...it depends.

Just working off the information you have given, I would say that mare #1 has been overbred. But who knows? She may be a wonderful physical specimen (and produce the same.) She may be owned by people who have more money than God and who love the 50K stallion. Or she may be owned by people who don't know what they're doing.

From the info in your post, I would guess that 2nd mare probably ought to have more money put into her stud fees than the first.

But 50K is a lot of money. I wouldn't put that kind of stud fee into any mare until she had either proven herself on the track or in the breeding shed (I'm talking about good blacktype) which neither of those two really have.

[LSB]

Forgot to say...if you're looking for a rule of thumb I've been told that the stud fee should be roughly equal to 1/3 of the mare's value.

[austique]

Deep breath...okay I thought I had gone momentarily crazy One if the breeder still owns mare 1 he has a lot of money. Two maybe they have a share and they run a lot of theirs. It just freaked me out to see an unraced mare by a $3,500 sire bred to Distorted Humor.

LSB, when you are determining mare value (don't cha wish you didn't open up that can o' worms), how do you go about it? I had put mare 2 at about a $20,000 fee possibly $25,000, but her sole auction result wouldn't support that (she was in foal to a cold as ice stallion, should that be taken into account?)

[LSB]

The purchase price is always a starting point for determining value, obviously. Especially if you bought at auction because that removes your emotional attachment from the equation and tells you what the marketplace thinks of her.

But of course there can be mitigating factors. And that one third thing is only a guideline. Not that anyone should want to follow my lead, lol, but right now I have one mare in foal to a stallion whose stud fee is 160% of her purchase price and another where the stud fee is about 10% of the mare's value.

[austique]

Makes sense. Actually I got her confused with another mare. Her lone auction price puts her at $15,000 if you use the 1/3 rule and I'm a girl who likes findin a bargain! Thanks for your help LSB!

[madelyn]

Another way to look at this is what kind of deal you might get on the mare if you offered her, for a deal... ie: mare share, foal share, etc.

Take a case in point. I have Express to Boston; nice mare, 17.1 hh if she's an inch, big gorgeous daughter of Boston Harbor. Half to 3 $250K+ stakes horses, one graded.

Picked her up cheap because previous owners couldn't get her in foal, despite repeated tries, over two years, even though she is quite a young mare.

She got approved on a foal share to Street Cry ($30K). Using LSB's rule is she a $90K mare?

Note she got in foal to Street Cry this year on one cover (May 7th).

Sometimes, I think the market can help you value the horse better.

By the way I think mare #2 has it all over mare #1 and is the better bet.[/list]

[George William Smith]

Hi Austique:
When I was starting out in this business the ratio used to be 5:1 and the stud fees very much lower which made it reasonable. Now that stallions can have well more than a hundred in a crop and a huge stud fee considering it's actual stud performance, 5/1 doesn't work anymore than 3/1.

As far as I'm aware and put into practice in my business, the value of the mare and the stud are like apples and oranges in value whereas before one could actually say we were comparing apples to apples in value, etc.

So my recommendation is look closely at each mare and put down the positives and negatives of each mare, then take your best shot at risk remembering that most foals fail to pay their way on the track. Also keep hope to a minimum with sales averages because so many of those averages are really phony. For example if Sire A has a stud fee of $50,000 and averages $200,000 a yearling last year and you have a yearling by him this year who is fairly correct and are taking him to the sales this year, be prepared if you are not well connected with the movers and shakers to be lucky to get the stud fee back. It is just a fact of life.

As a breeder with a nice yearling that moves well in your field and really impresses you, I would take him to a 2yo-in-training sale where his action in prevues can mute the movers and shakers and perhaps bring you some really big bucks.

ps. It is always better to name names when talking mares so pedigree's can be examined, etc., now that mares have become apples and stallions oranges.

best of luck in this tough, tough game.

George William Smith

[austique]

Thanks Madelyn and George for your input and as for stallions not providing much value relative to performance these days...ain't it the truth. I'm honestly beginning to think breeders aren't favoring younger horses just because their unproven and are clean slates, but because any amount of "proven" costs an arm and a leg Better to spend $10,000 breeding to something unproven that has a 20% of making a sire than to spend $10,000 on something you know is a pig Not that you don't have some proven values out their, but often they're cheap cause they don't sell

Part of the thing that is throwing me I guess is that with the advent of large books you have the filler factor where mares say that might be worth a $30,000 fee move to a $50,000 to fill books which draws $20,000 mares into $30,000 and so on and so forth.

And I prefer Mare 2 as well, I sort of have to

[louis finochio]

In any profession you will learn the tricks of the trade from the old school leading breeders.

A novice TB breeder would reap the harvest by researching what made those leading breeders, leading breeders.

[madelyn]

Thanks Madelyn and George for your input and as for stallions not providing much value relative to performance these days...ain't it the truth. I'm honestly beginning to think breeders aren't favoring younger horses just because their unproven and are clean slates, but because any amount of "proven" costs an arm and a leg Better to spend $10,000 breeding to something unproven that has a 20% of making a sire than to spend $10,000 on something you know is a pig Not that you don't have some proven values out their, but often they're cheap cause they don't sell

Part of the thing that is throwing me I guess is that with the advent of large books you have the filler factor where mares say that might be worth a $30,000 fee move to a $50,000 to fill books which draws $20,000 mares into $30,000 and so on and so forth.

And I prefer Mare 2 as well, I sort of have to

Interesting point about unproven vs. proven (pig) -- but wait and consider this. With the advent of the huge books, the "pig" might not be.. just might be the victim of bad matings. There are a LOT of stallions for whom there just are not 100+ mares who match them well. Indiscriminate breeding appears to be the culprit in "ruining" a young stallion. In the quest to collect massive quantities of stud fees before a stallion's offspring can prove or disprove his ability, the market can become polluted and the stallion tainted. Then it becomes a problem to sell his offspring, no matter how well mated the mare might be for that horse, and how likely that offspring is to actually run well.

[LSB]

Take a case in point. I have Express to Boston; nice mare, 17.1 hh if she's an inch, big gorgeous daughter of Boston Harbor. Half to 3 $250K+ stakes horses, one graded.

Picked her up cheap because previous owners couldn't get her in foal, despite repeated tries, over two years, even though she is quite a young mare.

She got approved on a foal share to Street Cry ($30K). Using LSB's rule is she a $90K mare?

Though I wouldn't call the 30% idea "my" rule, I do feel obliged to point out that you're using it backwards.

Its application is meant to go in the other direction, ie. if you buy a mare at a sale and spend 100K, then you should begin your search for stallions in the 30-35K range.

You can't just take a mare, breed her to an expensive stallion, and decide that makes her worth 3X the stud fee. Her value is determined by many other factors--including what the market will pay--and not by the cost of of producing the foal she is carrying.

By the way, madelyn, I hope you get a nice Street Cry. We love our 2YO by him.

[austique]

Madelyn,

Some "pigs" definitely have that problem, but I think a majority of the ones who have been poorly mated show something.

[madelyn]

Fair enough, it was just a thought.

[aurora]

Boy, figuring the value of a mare is tough, at least I find it so. If you look at an auction value, most mares sold are in foal so how do you really separate the value of the foal from the value of the mare. Additionally, if the mare is empty, she is penalized for being so. Maiden mares are typically the most expensive to buy provided they have done something on the track or have very good relations.