I used to hear a rule of thumb that a mare should be bred to a stallion that is standing for a third of her overall value. I am now kind of sensing that this has gone out the window? (sort of like the adage that your mortgage/housing expense should equal 25% of your monthly income). Just a couple of days ago I read something about John Nerud suggesting that you find an inexpensive mare that was hard knocking and move her up - don't be afraid to put her with a stallion of some cost.
Is this guideline dead and buried? Is there a new one?
Rule of thumb
Moderators: Roguelet, WaveMaster, madelyn
Guidelines are just that. Economically speaking, it is still a rule of thumb that the mare should be worth three to four times the stud fee you spend on her.
But what is a mare worth? The value of horses is quite a subjective topic. I'm a certified equine appraiser and I wrestle all the time with valuation puzzles. Which is worth more as a broodmare prospect.. a regally bred, but unraced, daughter of the purple with no apparent injuries (or excuses) or a hard knocking listed stakes winner who outran her humble pedigree all the way into six figure earnings? The final arbiter is supposed to be that a horse is worth what the market is willing to pay for it.. but that can fly out the window at auctions. At an auction, the selling price of the horse is dictated by the number of people present who want to own that horse. This can be affected by the time of day, the position of the horse in the catalog, the weather, etc. etc. etc., and have little to do with the horse itself.
A broodmare's value can also be affected by the length of time she has been owned. Here presents another puzzle, book value vs. market value. The mare may actually have a market value of, just to pick a number, $30,000. But she may be 12-13 years old and have been in constant ownership for 7-8 years and be fully depreciated. Thus the owner wishes to move her along and bring in another horse to depreciate. That mare goes through a sale, with no reserve, and through no fault of her own, brings an upset price ($1,000). Accounting wise, breeders can walk a fine line with the IRS and be reclassified as a hobby business if intent to profit can't be absolutely proven, especially if profit has not been achieved in seven years. So by moving out the 13 year old whose produce has not set the world on fire and acquiring a new younger mare or more proven mare the profit motive is secured.
But is the mare a $30,000 mare? If she sold for $1,000 is that her value? Take a case in point. I accidentally bought one at Keeneland, Believe It Shesdue, half sister to Devil His Due and three quarter sister to Copious, dam of Griffinite. If BITSY had produced much at all, she would not have been where she was in the sale and would have brought at least $40K. Is the production record her fault? Her first foal was by Strike the Gold, had 3 wins in 24 starts and made $16K. She was not bred back, and then hit MRLS in KY. She had an '03 by Tale of the Cat and honestly there is NOTHING in this mare's pedigree or family that says Tale of the Cat to me. She was bred to Stephen Got Even and produced in '04, '05 and '06. She did not get back in foal in '06 and was being put in the dustbin. I scratched my nose or something, and ended up with the sales ticket for her at $1,000.
I did not HESITATE when Darby Dan offered to take her for Saarland ($10K stud fee). I think the mare has had a run of poorly planned matings and bad luck (the '04 Stephen Got Even died as a yearling). Am I throwing out the rule of thumb? No. I'm throwing out the $1,000 sales result.
These kind of mares and the conditions under which they are sold can offer very good values to little breeders like me who have big plans but little budgets. Remember, the dam of Lawyer Ron went through Keeneland and failed to bring the upset before she produced that horse. Was she a $1,000 mare?
But what is a mare worth? The value of horses is quite a subjective topic. I'm a certified equine appraiser and I wrestle all the time with valuation puzzles. Which is worth more as a broodmare prospect.. a regally bred, but unraced, daughter of the purple with no apparent injuries (or excuses) or a hard knocking listed stakes winner who outran her humble pedigree all the way into six figure earnings? The final arbiter is supposed to be that a horse is worth what the market is willing to pay for it.. but that can fly out the window at auctions. At an auction, the selling price of the horse is dictated by the number of people present who want to own that horse. This can be affected by the time of day, the position of the horse in the catalog, the weather, etc. etc. etc., and have little to do with the horse itself.
A broodmare's value can also be affected by the length of time she has been owned. Here presents another puzzle, book value vs. market value. The mare may actually have a market value of, just to pick a number, $30,000. But she may be 12-13 years old and have been in constant ownership for 7-8 years and be fully depreciated. Thus the owner wishes to move her along and bring in another horse to depreciate. That mare goes through a sale, with no reserve, and through no fault of her own, brings an upset price ($1,000). Accounting wise, breeders can walk a fine line with the IRS and be reclassified as a hobby business if intent to profit can't be absolutely proven, especially if profit has not been achieved in seven years. So by moving out the 13 year old whose produce has not set the world on fire and acquiring a new younger mare or more proven mare the profit motive is secured.
But is the mare a $30,000 mare? If she sold for $1,000 is that her value? Take a case in point. I accidentally bought one at Keeneland, Believe It Shesdue, half sister to Devil His Due and three quarter sister to Copious, dam of Griffinite. If BITSY had produced much at all, she would not have been where she was in the sale and would have brought at least $40K. Is the production record her fault? Her first foal was by Strike the Gold, had 3 wins in 24 starts and made $16K. She was not bred back, and then hit MRLS in KY. She had an '03 by Tale of the Cat and honestly there is NOTHING in this mare's pedigree or family that says Tale of the Cat to me. She was bred to Stephen Got Even and produced in '04, '05 and '06. She did not get back in foal in '06 and was being put in the dustbin. I scratched my nose or something, and ended up with the sales ticket for her at $1,000.
I did not HESITATE when Darby Dan offered to take her for Saarland ($10K stud fee). I think the mare has had a run of poorly planned matings and bad luck (the '04 Stephen Got Even died as a yearling). Am I throwing out the rule of thumb? No. I'm throwing out the $1,000 sales result.
These kind of mares and the conditions under which they are sold can offer very good values to little breeders like me who have big plans but little budgets. Remember, the dam of Lawyer Ron went through Keeneland and failed to bring the upset before she produced that horse. Was she a $1,000 mare?
So Run for the Roses, as fast as you can.....
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HiddenEchoFarm
- 2yo Maiden
- Posts: 77
- Joined: Sat Jun 03, 2006 5:40 pm
- Location: Pennsylvania
Broodmare value
Madelyn:
Well said.
People often forget that there is a difference between price & value, and that value itself is a moving target.
Well said.
People often forget that there is a difference between price & value, and that value itself is a moving target.
I will take a hard knocking ol mare that wins 6-9 races against geldings and mares and very little money over a mare that wins 2-3 races makes a alot of money. The hard knocking mare will pass on the guts and heart it takes to be a runner.
I know alot of people dont agree with that, but it works for us.
I know alot of people dont agree with that, but it works for us.
Madelyn did a great job of outlining some problems and thoughts on trying to estimate value vs. price vs. stud fee. It is complex and she did a great job.
Of course, after a few years of study, a few years of failure, and a few years of utter frustration, I finally realized there is a huge, huge, huge difference between breeding to race and breeding for the sales ring.
If you are breeding to race, it doesn't really matter what you use for the value vs. expense ratio. Simply breed to a stallion that compliments your mare and offers the potential to give you the type foal you think you can get to the track and win with. Of course, in most cases these stallions will be less expensive. Also, you absolutely have to be hyper-critical of you mare or mares... you have to be honest, unbiased, and prepared to cull ruthlessly. Some mares may be capable of giving you some sale critters, but not runners. It all starts with your selection of mare... and price has little to nothing to do with a breed to race mare.
If you are breeding for the sales ring, I would suggest you read Madelyns post, print it an look at it often. However, I would also add that you probably can make your life and your decisions easier by doing some reverse thinking. (By the way, this is somewhat new to the industry and will cause many agents, bloodstock people, and stallion managers to cringe).
Forget trying to value your mare, forget trying to look at stallion averages (most the time they are manipulated, inaccurate, and useless for the masses... you can look at median, it is a slightly better stat). Look at what the mares foals have sold for... consider what you NEED to do to break even... in otherwords, try to determine what price, what value the foal may hold... then select a stallion whose market buzz, pedigree, conformation, and farm can get you there. In other words, find your necessary break-even point (which includes all expenses), then try to plan a mating to get you there.
It is not unusually, in todays market, to happen upon a mare whose foals have sold well, but she herself brings very little. Heck, in November there was a mare who sold for less than $10,000 in foal with a full to a weanling that brought around $70,000 in the same sale. Happens more often than one would think. Personally, I think it is in this area that now offers the "better" opportunities.
(Also, consider that in almost every other "way" to do things that are now in vogue, now popularized, and now being preached about, you will read, someone with more money, more time, more connections, and a vested in interest is doing the same thing and even the one offering the advice... it is hard to beat an established system... especially one as internally "biased" as that found in Kentucky. I find it amazing at how often a bloodstock "expert" will preach that you must plan on spending $100,000, or at least $50,000, to get a mare that can provide a chance to break-even... and, "...Oh by the way, I know where you can find such a mare privately...")
Also keep in mind, those simply breeding to sell fail to break even about 80% of the time. The number increases if you have to use boarding farms, etc. However, if you have the ability to RNA a weanling, RNA a yearling, and send the foal to the track yourself, you greatly enhance your chances for success. Simply, the market "feeds" and takes advantage of those who have limited options, they depend upon the ability to take advantage of them... and it is those with limited options who consistently, constantly, and predictably will lose great sums of money, no matter how useful their foals turn out.
I contend, under current market conditions, with breeders incentive funds, a breeder has far more chance in breaking even, possibly making a couple dollars, and enjoying themselves, if they take a breed-to-race stance. The breed-to-sell is just too much of an uncontrollable, uphill battle.
Of course, after a few years of study, a few years of failure, and a few years of utter frustration, I finally realized there is a huge, huge, huge difference between breeding to race and breeding for the sales ring.
If you are breeding to race, it doesn't really matter what you use for the value vs. expense ratio. Simply breed to a stallion that compliments your mare and offers the potential to give you the type foal you think you can get to the track and win with. Of course, in most cases these stallions will be less expensive. Also, you absolutely have to be hyper-critical of you mare or mares... you have to be honest, unbiased, and prepared to cull ruthlessly. Some mares may be capable of giving you some sale critters, but not runners. It all starts with your selection of mare... and price has little to nothing to do with a breed to race mare.
If you are breeding for the sales ring, I would suggest you read Madelyns post, print it an look at it often. However, I would also add that you probably can make your life and your decisions easier by doing some reverse thinking. (By the way, this is somewhat new to the industry and will cause many agents, bloodstock people, and stallion managers to cringe).
Forget trying to value your mare, forget trying to look at stallion averages (most the time they are manipulated, inaccurate, and useless for the masses... you can look at median, it is a slightly better stat). Look at what the mares foals have sold for... consider what you NEED to do to break even... in otherwords, try to determine what price, what value the foal may hold... then select a stallion whose market buzz, pedigree, conformation, and farm can get you there. In other words, find your necessary break-even point (which includes all expenses), then try to plan a mating to get you there.
It is not unusually, in todays market, to happen upon a mare whose foals have sold well, but she herself brings very little. Heck, in November there was a mare who sold for less than $10,000 in foal with a full to a weanling that brought around $70,000 in the same sale. Happens more often than one would think. Personally, I think it is in this area that now offers the "better" opportunities.
(Also, consider that in almost every other "way" to do things that are now in vogue, now popularized, and now being preached about, you will read, someone with more money, more time, more connections, and a vested in interest is doing the same thing and even the one offering the advice... it is hard to beat an established system... especially one as internally "biased" as that found in Kentucky. I find it amazing at how often a bloodstock "expert" will preach that you must plan on spending $100,000, or at least $50,000, to get a mare that can provide a chance to break-even... and, "...Oh by the way, I know where you can find such a mare privately...")
Also keep in mind, those simply breeding to sell fail to break even about 80% of the time. The number increases if you have to use boarding farms, etc. However, if you have the ability to RNA a weanling, RNA a yearling, and send the foal to the track yourself, you greatly enhance your chances for success. Simply, the market "feeds" and takes advantage of those who have limited options, they depend upon the ability to take advantage of them... and it is those with limited options who consistently, constantly, and predictably will lose great sums of money, no matter how useful their foals turn out.
I contend, under current market conditions, with breeders incentive funds, a breeder has far more chance in breaking even, possibly making a couple dollars, and enjoying themselves, if they take a breed-to-race stance. The breed-to-sell is just too much of an uncontrollable, uphill battle.