Thursday, June 21, 2012

The Price of Horses

"A horse, a horse; My Kingdom for a horse!"

Although King Richard's famous quote in the Shakespearean play is more about desperation than the actual price of a horse, the quote seems to embody our view of the modern-day price of horses.

The real-life, raw purchase price of a horse (with no parameters or filters set) varies from "free" to well over a million dollars (yes, for one horse).

But let me divulge some of the normal paramaters and costs for you, because I am sure you want to shoot me for giving you no information at all above, right?  Hold on to your seats......

I added up standard guidelines of the actual cost to "produce" a horse, because we have to have a basis for determining actual profit and loss.  Of course there are regional variations, but these are becoming more narrow in this economy.

Here is a "best-case" scenario of some of the costs if you are a person who breeds a mare, raises a baby, sells it and wants to break even.

Breeders, stop reading here, because if you read further, you will never breed another mare, run away screaming, and go panhandle on the interstate (it is more profitable and 'way less stressful, trust me).

And all you people who are complaining about what you have to pay for a horse, you are required to read all the way to the end...

The Raw Cost of Producing a Horse, broken out into ages:

Cost of Foal when it hits the ground (includes a portion of the purchase price of the mare <$10,000.00/8 foals>, stallion semen and regular breeding costs <$1800.00>, mare care for 18 months <$5591.00 includes 30 minutes of labor per day at $12.00 per hour>, vet care no emergencies, feet trimmed no shoes, etc. for both mare and baby)--


Cost of the foal bith to weaning at 6 months--  (includes feed, hay, shavings, feet trimmed, regular vet care, and mineral supplement, for both mare and baby)


Cost of foal birth to 3 years old--  (includes only baby at this point-- feed, hay, shavings, feet trimmed, 30 minutes of labor a day, biannual shots from vet and annual dentist) Note: no professional training has been included in this price, and labor is VERY conservative at 30 minutes per day.


Cost of horse, birth to 4 years old-- (above price, and with one year of training under saddle at $1500.00 per month, 2 schooling shows with trainer, and 4 rated shows with trainer)


$51,455.00 after just one year of training and 6 shows. In Dressage, the horse would typically still be in Training Level, with maybe a test or two at First Level for a very talented horse.  And $51,455.00 is just barely breaking even if everything has gone perfectly and there are no extraneous costs in four years. Yeah, right.
I want you all to consider something.  The above calculations are raw and technical, and do not take anything that is intangible into consideration, such as bloodlines, breed, talent, temperament, health, etc.  It assumes NO health issues or injury, and let's face it, what horse lives for four years and never has an emergency call from the vet?
If we paid for everything that is put into a horse, very few of us would be able to afford one.  All along the way, people are willing to lose money (the cold, hard cash kind), in order to be able to "afford" a horse.
No wonder the asking price for a 10 year old talented Grand Prix horse is over $250,000.00. You do the math.
But maybe these calculations will make you understand why there is so much variation in price in horses.  When it comes time to sell your horse, the price is not generated by how much you have spent, but rather, what the market will bear for YOUR horse, with his particular set of circumstances at that point in his life.  I think with this in mind, buyers may appreciate a breeder's perspective a little more.  
Now here is a bare-bones cost calculations, without taking some indirect costs into account (like mare depreciation, a lesser quality stallion, pasture only, feed just to keep minimum weight, owner administered shots, minimal trimming, no labor figured in, no training, no showing, etc.) 
Cost at birth-- $5205.00
Cost at weaning (3 months)--$5451.00
Cost at 3 years old-- $10,137.00
Again, that price is barebones, and doesn't really reflect the time and effort put in (everyone's time is worth SOMETHING!) And who would want an untouched 3 year old that has had substandard care for his entire short life, much less pay $10,000.00+ for it?
The bottom line is, that if you are getting a pleasant, healthy horse that is ride-able for less than $50,000.00 you are getting a bargain.  If you are getting a horse that has a good temperament, solid basic dressage training, has been shown, and has fairly good gaits for less than $50K, you are getting much, much more than you "paid for". 

Conversely, an ill-tempered, untalented or badly trained horse (or even a horse that is just not suited to the kind of riding you want to do) is worth LESS than nothing.  Because at best, it will cost you more money and give you no pleasure, and at worst, it can kill you.  I am not kidding.  I am not exaggerating.

If you are having trouble believing me, do some honest calculations of your own.  I didn't even include farm and pasture management and maintenance, insurance, taxes, or salary for the farm owner/breeder.

Both categories--buyers AND sellers also need to understand that a horse puchase is like a car purchase...fully 90% of us will never recoup our investment in dollars.  Horses generally DEPRECIATE much like a car does; quickly at first, levelling off after a while, and settling into a minimal selling price as the horse ages and is ridden.  And gas, oil and tune-ups (feed, hay, and training) are never recouped.