A Note about Sugarbush Draft Horses

I see it over and over again, and no matter how many times it's said, it's still wrong. "Sugarbush Drafts are just an Appaloosa Draft Cross". Uh.... no. The Sugarbush Draft Horse was a breed created many years ago in Ohio. While the initial cross was made using Percherons to Appaloosas, in the many generations following, the breed has been solidified into a consistent type. Saying these horses are "just" a draft cross makes as much sense as saying that AQHA horses are "just" a Thoroughbred cross, American Cream Drafts are "just" a dilute Belgian, or that Morgans are "just" a grade.

Thursday, February 14, 2013

How do I price a foal?

Reading through sales ads, I often get the impression that people price their horses based on what others price their horses.  In other words, no one really has a clue.  The problem is, that many of our buyers don't have a clue either!

As a breeder, I make my income off of horses.  This means that if I am going to make a new horse, I need to be able to at minimum recover the money I invested into that horse.  If I can't do that, then it would make more sense for me to go buy horses for strangers and give them away.  (Plus it'd put a lot of horses into some good homes who deserve it).  You see, many people think that you put the stallion with the mare, and get a "free" baby... but that's not the case for ethical breeders.

There are 2 basic ways to price a foal.  You can cover THAT foal's cost, or you can cover the farm's costs.  I'll explain that as I go along.

To cover the cost of the foal is pretty easy, but you have to actually calculate the costs of the foal.  First, there are the vet bills.  For many breeders, the first vet bill is checking out the mare before she is bred.  Is she cycling yet?  Does she have any uterine issues?  It's a good idea to get a pre-foaling ultra sound done on the mare before you breed her.  If you're breeding by AI, it's a must - so that you know when the mare needs to be inseminated.  Cost for Ultra Sound - $36

From there, you get to look at the stud fee.  If you own your own stallion, you still have to calculate this in.  You see, if you're running a business, that stallion has to pay for himself, other wise your business is taking a loss.  If you're running a hobby farm, sure, you can take this loss (by just calculating the cost of the foal, not the cost of running the farm, I did say this would come in later).  You can either set this as a base cost, or calculate the cost of keeping the stallion for a year.  I prefer the later.  If you're breeding to an outside stud, the cost of the stud fee is simple.

For me, I know that my stallion is pretty cheap.  He costs me about $60 in grain, and $45 in hay each month, plus farrier care which we do here for free.  At $105 dollars a month, he costs me $1260 a year to keep.  I divide that by 4 (my average foal production) to get his stud fee.  $315

So far, that baby has cost me $351, and isn't even conceived yet!

From there, you need 2 more ultra sounds (minimum) to determine pregnancy, and check for progression of the pregnancy.  $72

Running total - $423

Your mare is going to need a set of pneumabort vaccinations at the 5th 7th and 9th months of gestation.  This costs roughly $15 dollars each, so adds $45 to the cost of the foal.  $468

In the last trimester, the mare will need additional grain/feed to give to the foal.  For me, this is approximately $30/month for 3 months (and again, my costs are exceptionally lower than most).  So add another $90 bucks, for a total of $558.

30 days before the foal is due, you should give the mare her full set of vaccines.  This transfers the immunity to the baby, and is kinda like giving the new born its first vaccines.  The 5 way costs about $25, rabies costs $17, we skip West Nile because it can cause complications but do give a dewormer around this time which costs $9 dollars.  So we add another $51 bucks to the cost of the foal, for a running total of $609.

Then there's the foaling prep.  You will need straw for the foaling stall.  I average about 2 bales of straw per stall, and have to add more every 4 days.  This means I go through about 15 bales of straw for the pre-foaling watch, since I like to put my mares into their foaling stall a month early and let them get comfortable before labor.  That's about $90 dollars, for a total of $699.

In the last 2 weeks of gestation, I like to give my mares alfalfa for the increased calcium.  I use roughly half a bale a day per mare, at $14 per bale (one thing that isn't cheap here!).  That's about 7 bales of alfalfa that costs me about $98 bucks.  Total for foal: $797

Then the big day arrives, but the baby's costs aren't done!  Once the foal is born I need to give a tetanus antitoxin (because the tetanus virus is native in our soil) and do an IgG test to be sure the baby got enough colostrum.  That's $18 for the tetanus, and $28 for the IgG test, costing me $46 bucks on the big day.  Baby now costs about $843 just to get on the ground.

But I run a farm.  This means that the breeding herd has to pay for itself.  I do not breed my mares back to back, so that the ladies can have time to recover, have other jobs, and be pampered and loved on.  Since most ethical breeders do this, that means that they have brood mares who are sitting open, and not paying their own way.  Assuming that for every mare that is bred, there is one open, and that the mares are earning some income to pay their expenses (my mares cost me about $105 per month, and make roughly $75 per month) that's $30 per month that needs to be added onto the cost of the baby.  That's roughly $360 each baby has to pay for, for a total of $1203.

This means that if I sell a foal for less than $1203 dollars, my business just lost money.  That's equivalent to the average person taking a job that pays $50 and spending $75 in gas to get there.  Few people would do it, but so often this is exactly what breeders do!  No wonder people say you can't make money in horses!

I didn't even include the costs of the farm itself.  Mortgage, utilities, insurance, horse insurance, wages and such add on top of all of that.  Since my farm has many streams of income, I am able to pay those bills through things like lessons, training, and sales of our Second Chance horses, so don't add them in.

But lets think about it.  We all sell horses to make a PROFIT. This means that if I sell the above baby for just $1500 dollars, I've only made $300 bucks for a YEAR of work.  That comes out to merely $25 bucks per month.  That doesn't even pay for my groceries, let alone the web hosting, cell phone, driving miles to and from the stores, and other things that the average person does.  And this is only talking about the cost of getting the baby born.

Once the foal is on the ground, I have to pay for additional feed for the mare (which she shares with the baby one way or another), farrier for the baby, vet bills, deworming, a share of the web site for the sale ad, online advertisements, and of course, grooming supplies.  As a hobby farm you can absorb those costs because it's enjoyable.  As a business, I can not.  I do not have an outside job to pay for my breeding, so it has to pay for itself.  All of those things can easily run upwards of $500 bucks in the 6 months it takes to wean the foal, resulting in a cost to me of over $1700 dollars.

This means that I ask a nice round number for suckling foals, currently it is $2500 per foal.  That covers the expenses both direct and indirect, and allows me to keep doing this for one more year.  I only breed the number of horses that I can afford to keep (because not everything sells) so that I am not pressured to lose my shirt (and home) in a passion that I love so deeply.

My personal opinion though, is that if you can't sell the horse for the amount it costs to make it, why are you breeding it?  If it isn't worth its own expenses, than is it really worth adding it into this world?  You see this all the time on Craigs List... horses offered for a few hundred bucks, from a breeder who is going to just keep pumping them out.  If you want to be a quality horse breeder, you have to know what your foal costs to make, and be willing to pay for it!

Yes, this is a risky business.  Not all horses are going to sell for their asking prices, and not all births will be a simple one.  The profit margin of each foal born should have enough padding in it to cover the unexpected, and to pay the breeder for the WORK they put into that foal.  We spend time socializing and training them, and while we enjoy every second of it, we still can't just give it away for years on end.

And sure, there are times when taking the loss makes better business sense than trying to earn the cost back.  As the market changed I moved out of Appaloosas and into the Sugarbush Drafts.  My Appaloosas are not worth the money I invested into them (as I've owned them for many years) and hence I will lose money on them.  I am currently selling a few light horses at well below their cost to me, but by finding them amazing homes I can both sleep at night, and have more cash to invest in the horses that are paying the bills (plus my pets... I do have a few of those!).  But, I do have to remember that the business must make money, or I don't get paid.

Unlike most breeders, I make my entire living off the horses.  I have no outside job to bring in cash for the bad months.  I have to calculate the cost of everything, and produce enough profit to protect against the "what ifs".  I am not rich, nor likely will I ever be!  I work long (but rewarding) hours, and do my best to balance the hard calculations against those brown eyes each spring.

So before you gasp at the cost of a horse listed for sale, stop and think about what you are paying for.  My foals will come to you bathing, clipping, loading, standing, easy to catch, and with no known health problems (unless disclosed).  They are well socialized, and have known nothing but love for their entire life.  We breeders want to make it as affordable as possible, but we can't give them away and keep caring for our horses with the same level of care that buyers want.

The irony to me, is that most buyers will try to save a few bucks and end up rewarding the very people they despise.  By paying poor breeders you are reinforcing that their horses are desirable and encouraging them to breed the next year - often at the risk to the breeding stock they still own.  We all understand limited budgets (hey, I'm there too!) so if you're interested in a quality horse, but worried about the price, try contacting us.  We're happy to talk about our babies, and usually willing to work with buyers on the price and payment options (often before the horse leaves the property) so that you can have the horse of your dreams, our babies can get amazing homes, and we all end up happy.

But sadly, making more horses isn't something that is free.  To do it right, you have to spend money, and you need to know how much money you really are spending.

Wednesday, February 13, 2013

I know I've been away, but I haven't forgotten

It's been ages since I've managed to find the time to blog.  I haven't lost interest in it, but I have lost the free time to do it.  Many people have had a hard time understanding the crazy hours I put into the last of the SDHR push for the Foundation Program.  Let me explain it a bit.

I evaluated countless horses over the last few years.  Each evaluation takes about 4 hours to complete and write up.  At the peak, we were receiving 10 horses a day (or so) to review.  I began to get further and further behind schedule.  While this was going on, I was also trying to manage my own farm, and getting behind on that as well.  A typical day here was roughly 18 hours of work, with an hour of relaxation, and then a few hours of sleep before I started it all again.  The further I got behind, the more I worked to catch up, and the less time I spent with my own family and pets.

I've been doing this - not quite as intensely, but still - for 5 years now with out a break from it.  I've been on call all day, all night, every day.  The idea of going to a movie meant advanced planning, lets not even talk about getting out of town for a day or 2!  And so, as of January 28th, I took a month of vacation... from the SDHR.

Sad to say, that doesn't mean I'm truly on vacation!  I still have Iron Ridge to run, horses to train, stalls to clean, and those sorts of things.  I am not complaining though!  I'm now working a more reasonable 8 hours a day, and doing the things that I wanted to do when I got into this line of work (horses).

The upside is, that I again have time to write.  I have a few topics that I plan to put out there, and hopefully some of you will enjoy and learn from them.  Since foaling season is coming up, you can best that a good part of my topics will be based on the horse business again.

So sit back, and prepare for a new and consistent stream of blathering from me.  From discussing the daily activities of the farm, to the business side (tomorrow's post is how to price a foal) I have lots lined up, and am ready to start getting on my soap box again.