If you want to make a small fortune in the horse business, you need to start out with a large fortune.
Our cutting horse breeding venture made money until 2008. It was all downhill from there and is still going.
The industry took about 4 hits all at once.
1) The slaughter market disappeared and that set the bottom or starting price on every other horse. So, overnight, saddle horses, broodmares and prospects dropped by at least $500.00 each and most dropped much more.
2) The economy took a nosedive that we are all familiar with.
3) The market was over-bred by a huge number. In 2007, so many cutting / reining / cowhorse bred mares were bred to the well known big-name stallions, that we all knew a crash had to be coming. Even a good market could not absorb all of the foals that were going to be born in 2008.
4) The registration of Embryo Transfers meant that there was an almost unlimited number foals that would be available that would be out of the elite performers and producers in all three industries. The middle quality mares could no longer produce foals that would sell for even close to their cost of production.
Pryor to 2008, you could take a $10,000.00 mare, put a $2500.00 stud fee in her and raise $10,000.00 babies and yearlings. Now, that same mare will raise $1500.00 - $3000.00 babies out of a stud with a $2500.00 stud fee. I have watched yearlings sired by leading stallions out of mares that won $25,000.00 in the cutting pen sell for less than the stud's fee.
Now, you have to take a $100,000.00 mare, put a $5000.00 stud fee in her to even get a $20,000.00 yearling.
I sold a Freckles Merada daughter in foal to Thomas E Hughes (has won almost $400,000.00 and I paid $3500.00 for the stud fee + mare care and a chute fee) for $3000.00. Oh, and by the way, the Merada mare produced a semi-finalist in the 2009 NCHA Futurity and won over $20,000.00.
Does that sound like there is money in it any more? Get out while you can because every penny you put in now is just more money you will lose. That is why I let the Merada mare go.