People wonder why a particular horse is worth more than another. How can one horse be priced high and another horse be valued much lower? As with any other item for sale, it all comes down to market value. A Rolls-Royce is worth more than a Honda, and a Louis Vuitton purse is worth more than one from Wal-Mart. Obviously quality and excellence play a large part in the difference between these items, but another substantial factor is supply and demand.
Like any other business, the horse business is influenced by outside factors. The economy, politics and, of course, supply and demand all affect pricing of products and services. A horse that is worth $50,000 at a determined point in time might not be valued the same if the economy is not at a peak. That doesn’t mean the horse is not worth its set price; it simply means the market is not able to pay that amount of money at that point in time. As such, there isn’t one perfect answer that helps buyers and sellers determine a horse’s price. So, I will try to decipher some of the more critical factors that determine, in part, at what price a horse should be valued.
One of the most important things to consider is the type of discipline in which the horse will be expected to perform. There are some patterns in breeding that have been practiced for decades, which are used to improve a horse’s genetics. You certainly can train a horse with a different genealogy line; however, the needed results will likely come much easier if you start with the right genetic bloodline.
Breeders often use the term conformation. The conformation of a horse (or any animal) is a detailed description on its size, structure and shape. For example, a horse with barrel racing bloodlines can be taught to cut, but it might not be as competitive or efficient at the sport as a horse bred specifically with cutting in mind, because horses for these sports have different conformation and mindsets.
For this reason, a horse with barrel horse genetics would not have the same value in the cutting market. More specifically, if I breed a colt to be a barrel racer, my sale target should be the barrel racing industry. In any other discipline, the colt will not garner the same value. Simply stated, let’s not mix bananas with apples, unless you like (low-priced) fruit salad.
This is why people in the horse industry talk about pedigrees, proven genetics, black type pedigree, and proven sires and dams. Genetics in each specific area of performance determine a large percentage of the horse’s value. Yet, even with cutting horses, we see a difference in prices of horses despite being the same sex and age.
Certain lineages generate more interest. This is because there is a desire on the buyers’ side to own what is hot! And if it’s hot, it tends to be because it is working. Often there is a stallion who has won a lot of money and therefore promises to sire a new generation of champions in the show pen. The same logic applies to the dam. A good dam will tremendously increase the value of offspring if that dam is a proven producer (her babies are champions) or if she has won significant amounts of money. The main difference with a dam is that she can only give you a limited supply of foals in a determined year, typically less than four – even if embryo transfer procedures are used.
Good genetics are critical, but they don’t guarantee the right conformation. The conformation of the horse is very important in determining the value of a horse. It does not mean a horse with less-than-ideal conformation can’t do the job, but the right conformation helps a horse’s performance. In particular, it improves athletic ability and it minimizes the risk of the horse getting hurt.
A well-made horse is one that will attract buyers. Everyone likes a horse that has good and thick bones, strong hips, a short back and a balanced neck. Horse height requirements are dependent on the sport. Typically, racers prefer a taller horse, whereas a heel roper or a cutter will prefer a horse to be smaller.
Beauty and the color of a horse will not influence the judge’s score sheet in cutting events, nor will it affect the time it takes to rope a steer or race around a barrel. But, it surely affects the mind of the buyer. If a buyer has to choose between a pretty horse and one that is less pleasing to the eye, he will most likely go with the pretty horse. These are factors that can be achieved when you breed to a horse who passes the grade on conformation and beauty, though these traits are not guaranteed to be transferred.
This explains why people look around at all the studs in a stallion station; they want to see if the conformation of the stud is something that would blend well with the dam to make a good match. Let’s face it – the bottom line is that beauty plays a big factor in a human’s eye, and beauty certainly helps sell a horse. We tend to look at a yearling colt and say, “Boy, that one sure looks like a stud!” What we are really saying is we think we can add a little bit of aggregate value to him, because his appearance stands out. Even so, if the horse’s pedigree is not on point, then you might as well view him as a gelding. Chances are that horse will not make it in the breeding world, even if he turns out to be a good athlete.
Finally, to value a horse, you really need to know your competition and where you are trying to sell your horse. Like I mentioned earlier, a horse’s value is no different than any other item for sale in the market. If my competition has a horse of an equal value priced lower, chances are the other horse will sell first.
You have to know what method of sale you are trying to pursue. Whether at an auction, private sale or an internet sale, knowing what your competition has to offer will help you determine not only the price of your horse, but also how quickly you will sell it. If I price my horse at $25,000 when it should be valued at $15,000, he might sit in my barn for a little longer than I planned.
Suffice it to say, the horse market is a complex one. But, if horses are what you love, then you should stay involved. I have often heard of someone who got disappointed and dropped out of the industry because they did not do well with a horse. We are all trying to have the one who sells for $100,000, and we are all trying to have the one who wins it all. It takes experience, education, studying and a little bit of luck to succeed, but when it happens, it is definitely well worth it. Breed smart, stay persistent, study what you and others do, and eventually you will get where you want with your breeding program.