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The American Miniature Horse as a Business Pursuit
Many people these days are looking for a way to add a little extra income. With statistics saying the average annual income for a single person is 18k, and 40k for a couple, this isn't surprising! If carefully done, the Miniature Horse can be a wise investment, and give a 50-100% annual return depending on current market.
I cover alot of aspects on this page, and may ramble a bit, so beware. Also, these are just my opinions, based on our personal experience. I feel them potentially valuable though as we've assisted a few people in starting, and have been told I should put stuff in print, so here goes...
There is much to consider though, as with any business proposition. I am by no means an expert on the horse industry, but thought perhaps sharing some of our research and experiences could be helpful to those looking to start out, or to modify their program.
Horses are NOT a tax loop hole. The IRS has a reputation of being suspicious of horse farms, as horses are not considered livestock necessarily, and are often a hobby animal. You are given a minimal number of years after first filing as a business or farm to show a profit. Record keeping is essential. Reciepts should be kept and neatly organized for easy access. A seperate bank/credit union account is necessary. A notebook or computer program to track your activities (everything from breeding to maintenance care), and an annual business plan, should be kept. It is normal for a business plan to change a bit from year to year, as your knowledge grows and you modify initial goals. It is good to show a record of tracking this. A knowledgable accountant is a great asset, but finding one who understands the horse business may be hard! We heard statements from "Well I've never done a horse farm before but I'm willing to try" to "Horse farming for profit is only legal in Kentucky" OKay.......if you plan on filing as a business/farm, and don't mind reading, the tax manuals can be fascinating and mind-boggeling, LOL!
So, all of that said....CAN you profit in the Miniature Horse?
Yes!
First, you need to have a basic knowledge of the breed, and what YOU want to accomplish. How much land do you have, or have access too? How many horses do you want in your herd? How much income do you want to make annually? Do you want to focus on a certain area of the business? There is market potential for pets, open shows, 4H, rated show animals, breeding stock, therapy animals, various driving pursuits, be creative! The market though, like any other, does seem to run on a cycle...stat's say the "usual" cycle is 10 yr periods of swinging up and down for any business, of course this is general. If you can create a niche, in our opinion, you are going to be better off. All one has to do is go to the sale boards to find hundreds of animals available, and some parts of the market seem to have reached saturation. We make this statement as we bought in (oops) when the market was "high" and the quality of animals we saw selling for 5 digits can often currently be had for much less. It is currently a buyers market. But, on the buying end, that's the best time to buy in!
It is our experience that "pets" normally sell for $1,000 or less. Sometimes much less. Of course, you pay less for start up, as your initial stock is bought in the same price range. But don't expect to sell foals from $500 mares for thousands. If you already are set up though (ie, you don't need to build a barn and fences, so you have low start up expenses), you could add a couple thousand dollars to your income annually selling pets. Homes can be a problem...you hope not, but we need to be realistic. A responsible breeder should be willing to teach their clients proper mini care. It's not hard, but if someone has never owned a horse before and you don't do it, the horse is usually the one who pays.
There is a wide variation in pricing in breeding/showing stock. If one wants to sell for top dollar, you have to be showing, and successfully. One cant' just buy top animals and expect to sell them high if you aren't out there marketting yourself. I define top dollar as 5 digit animals.
Really that goes for probably the largest market also. Most mini's sold by smaller farms for show/breeding stock seem to fall in the $1,000-$5,000 range. The higher end of that is very good animals, from farms that market their product well! Let's face it, a product is a product, and marketting is essential. Thankfully, it doesn't have to be terribly expensive either, esp with the internet options available. Print is still the most expensive form, and must be maintained on a regular basis to pay off. However, if you show, it is in our opinion a good idea!
Initial investment thoughts:
Your Stallion: Remember, this is your 'headliner'. It's your stallion who will get the most press, good or bad. Of course, you prefer it to be good! He needs to be as good an example of a horse as you want to breed. If you like long necks, don't buy a short necked stallion, for example. Size in mini's varies greatly, and what a stallion himself is will not necessarily be what he throws! Just because your horse is under 30", he may not throw small foals. Or he may. It depends on his genes, and how they cross with the mares you choose for him. Remember mini's have a shetland foundation, and height can throw back. Also remember many early breeders used dwarf's heavily to bring size down as far as possible, so dwarf gene's are a risk. Much more responsible breeding that way though has seemed to greatly reduce the number of dwarf's being produced, and they usually have a short lifespan. Prepotency is the word that describes how predictably a horse throws a certain trait, or group of traits. It allows you to predict to varying degree's what your foals will look like. Homozygosity is another word to get to know. A homozygous horse will ALWAYS pass what he is homozygous for. If you want pinto only babies, buy a homozygous stallion, he will always make pinto babies. If you want to produce only blacks, you want to try and find a stallion that is homozygous for black. If you want to produce only dilutes, you want a stallion that is homozygous for the dilute gene, commonly known as cremello or perlino. Conformation traits, unfortunately, are not as easy to determine homozygosity for, if it even exists. And as beautiful as a horse's coat is, if the conformation isnt' there to back it up, you are hurting the breed in the long (and short) run.
A common breeding misconception is to 'balance' your stallion and mares flaws. We were taught this one early on, and believed it ourselves until we began doing much more in depth research on breeding. You know, "if your stallion has a weak hip, just buy him stronger hipped mares". Well yes, to a degree. No horse is perfect, so there is some measure of truth to that idea. HOWEVER!!! we've seen this taken to extremes. One breeds a stallion with a poor croup and weak shoulder, but nice head and legs to their mare with a plain head and cowhocks, but wow what a shoulder and hip on her does not mean you are going to get a foal with a nice head, good legs, strong shoulder and great hip! You could just as well get one with a plain head, weak shoulders, poor hip, and cowhocks! And even if it does turn out decent, the genes for the flaws are then carried recessively, and if he/she gets mated to another horse carrying those same recessive genes, then out come those traits again! And if you bred multiple animals throwing the poor foals--well, can you see what that could do to business?
So you want your stallion, and really mares, to be as near to what you want to produce as possible. One great thing about mini's is there is a type for almost everyone. A show horse these days has to look like a horse--lots of leg no matter how tall, lots of neck, a pretty head, good shoulders, hip, refined. Otherwise, style is up to you. Some like a more QH or draft style for kids to ride or maybe to drive with a conestoga wagon in parades. Most everyone, no matter the use, wants a horse that LOOKS like a horse, not a dwarf. And good conformation does relate to good health. Quality does sell better, and costs less to maintain. I've known more than one beginner buy a 'deal' only to sink one or two grand into keeping the poor animal alive and find out it's not breedable for physical reasons, or shouldn't be bred with for genetic flaws. There are definitely deals out there...but few beginners find them right off the bat. If you think you've found a deal, ask a mentor "is this really?" before jumping, and don't fall for pressure tactics as too many people use them to sell!
Mares: The backbone of your program! These girls will make or break your stallion. Choose carefully! A mare should be feminine in looks, correct conformationally, healthy, and fertile. Beware of small auctions, they can be a dumping ground for problem mares. The terms "exposed" and "bred" can simply mean they were in a field with a stallion, or were covered. Look for 'vet checked in foal' or a reasonable explanation of why she's open. Few people breed every mare every year. It's common to give them time off, and it's common for them sometimes to simply take time off. People move, don't sell all of last years babies, have family situations come up. So 'open' doesn't necessarily mean 'not fertile', but do ask questions. Honest breeders are not afraid of questions.
The nitty-gritty stuff--$$$$
So you want to buy some good, quality mini's, and get a return on them. Here's some potential happenings:
You invest $3,000 on a stallion. Buy 2-3 mares, AT LEAST one bred or with foal on side. This is so you can get a return! Foals are ADORABLE, and it doesn't hurt to buy one or two...just dont' start with all foals unless you can afford to wait 4 years for a return. You spend $1200 on a filly foal, $2500 on one mare, and $3500 on another, bred. You have an initial investment of $10,200 in your stock.
A good rule of thumb is a mare should be able to pay for herself in 1-3 foals, a stallion in one breeding season. In these price ranges, you are staying well within those guidelines. Your $3500 mare foals, and you sell the foal for $2000 (remember, this is hypothetical). Your 3k stallion breeds both mares, and the next year you are able to sell one for 2k, one for $2500. Your stallion is paid for, as is the $3500 mare. You breed again, and the next year do the same thing. Your stock has now paid for itself, and you are into the profit range. Your filly has turned 3 so now can be bred, and you can have 3 foals the next year, all will be profit. If each of those foals sells for 2k, you have 6k income. Of course, you may have in the meantime re-invested some of the money from selling your foals to buy another mare or two...you may have begun showing, been marketting well, or created a niche of some sort where your foals sell for more. And other than maintenance expenses of feed and care (any machinery needs maintenance, no matter what business you are in), you are profit from here out. Your $2500 and $3500 mares should be selling foals for what they sold for to you, now that you've got a bit of time invested (yes, there are dues in the form of time to pay, as in any business) and there you go! Not many ventures can return that well. And again, this was an example. Depending on the stallion your purchased mares are bred too, the foals may sell for more. You may get some good deals with help and find some really nice mares for 2k bred. Blood is meaning more and more, as lines are getting established more, and it can be determined how prepotent they are. National Champions come and go, and some Nat Grand winners no one even recognizes their names anymore...why is this? Either the horse didn't produce, or wasn't marketted, or both. Some horses turn out to be very prepotent and go on to produce consistent quality foals--and this is the ideal you want. Remember, the closer in lineage an animal is to the foal, the more of an influence it will have on the foal. Multiple ties increase the ancestor's influence. Less than 12.5% blood, it is accepted there is very little influence in resulting generations.
I hope you find this page interesting and informative. We love to talk mini horses, genetics, bloodlines, shetlands...so feel free to contact us at any time.
Tina
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