So, You Think You Want to Own a Stallion
by Dr. Jim and Lynda McCall
Before you leap into this quagmire, take a minute to take this quiz.
1. Why do you want to buy a stallion?
A. To save money breeding mares
B. To make money standing a stallion
C. Just wanted to always own a stallion
D. Looking for a financial loss
2. Do you have facilities needed to stand a stallion?
A. I have stallion facilities but need to build stalls, paddocks and pastures for both wet and dry mares.
B. I have safe mare facilities but need to build a stallion barn and isolated paddock for stallion turn-out.
C. I don't have any facilities but plan on visiting several breeding farms before beginning construction on my farm.
3. Do you understand the behavior of breeding stallions?
A. No, but I plan to hire a stallion manager.
B. No, but I plan to go to some short-courses to learn about breeding stallions.
C. Yes, I have some personal experience standing stallions.
4. Have you developed a financial plan related to expenses of owning and standing a stallion?
A. Yes, me and a couple of my buddies are going to share the expenses of owning a stallion
B. Yes, My banker and financial adviser and I have developed a plan to make money standing a stallion
C. Yes, I am going to buy a inexpensive stallion so I can just bred my mares.
Regardless of the reasoning behind your plan to own a stallion, the goal of the venture centers around increasing the profit margin of your farm operation. How quickly the bottom line of your financial plan moves from the red to the black depends on the all-important question:
How much should I spend on a stallion?
In an effort to help you focus in on the answer for your unique situation, we offer the following questions and comments.
How long should it take for a stallion to pay for himself?
The rule of thumb used by most commercial stallion operations is that a stallion should pay himself out in 2 1/2 years.
What are the expenses directly related to standing a stallion?
These expenses are going to be dramatically different depending on whether the owner stands the horse on his own farm, hires help or sends the stallion to stand along with a battery of other stallions at a stallion station.
For the sake of argument, let's look at the best case scenario. You own a farm which has facilities for both stallions and outside mares. In addition, you have experience in handling and breeding stallions, managing and teasing mares and the care of newborns and weanlings.
A rough estimate for this operation might be:
Boarding Costs: $3600/ year
Herd Health/Farrier $300 a year
Insurance: Usually estimated to be equal to one stud fee ($500)
Advertising: Usually estimated to be equal to two stud fees ( $1000)
Minimum expenses: $5400 a year (not including any labor costs).
Now to the most difficult part .....
What can be expected in the way of income?
Most first time stallion owners think this is easily figured: Multiply the number of mares times the stud fee. Actually this is just the starting point from which other factors need to be subtracted. For example, BAD DEBTS - Yes, even in the horse business there are unscrupulous souls who forget their check book and whose payment is forever "in the mail". And don't forget a "fudge factor" for group discounts, considerations for mares capable of producing outstanding foals and deals for your brother-in-law or your preacher.
Then if you have a "Live Foal Guarantee", you must be realistic about rebreeds - mares that do not produce a live foal. Mares returned for service without the payment of an additional stud fee will eat into your profit column. It is possible and probably, probable, that 20% of the mares booked to a horse will be rebreds from the previous year.
Being generous we might subtract 10% for bad debts, 10% for special deals and 20% for open or barren mares.
That is a 40% loss off of the total amount of money collected from mares bred. Which brings us to the pivotal question:
How many mares can the stallion expect to breed?
If your stallion falls into the category of average, the answer is 10. The average breeding stallion breeds about 10 mares a year. Using this number our stallion standing for $500 would billed out $5000. His yearly income after deducting 40% would be around $3000. A mere loss of $2400 a year!
To make a stallion a profitable venture in this situation, we have to change the numbers. In order to pay out a stallion standing for $500 in 2 ˝ years, he must breed 30 mares and cost no more than $13,000 -- and that's assuming that you already have the facilities to handle 30 mares, adequate stallion stalls and turn-out and the labor and expertise to pull all of this off. And then there are the headaches, the responsibilities, the liability exposure .......
Are you still sure you want to own a stallion?
If you do, click here for information about the online course Stallion Management taught by Dr. Jim and Lynda McCall.