A horse is worth whatever someone is willing to pay. But what makes one worth $10,000 and another—same pedigree, age, sex, and type—worth $100,000? The answer is as varied as the definition of happiness.
The simplest answer of all is this: he who has the gold makes the rules. The buyer, not the seller, determines value. A seller can overprice their horse, but good luck finding a buyer.
What Is a Horse Really Worth?
Is it worth what I paid for it? What my trainer tells me? Do I add up my expenses to find the total? If a full sibling sold for X, does that make mine worth X too?
To me, horse values are more like artwork than commodities. Beauty is in the eye of the beholder. I wouldn’t pay $1,000 for the Mona Lisa if I had to keep it forever. But I’d sell my house to buy it for the same price if I could flip it for profit. The Mona Lisa would be a very large profit indeed.
In the horse world, we call that pinhooking—buying low to sell high. I looked back recently and realized I’ve pinhooked over 900 horses so far. Not as many as some, but more than most.
Experience Counts
Having a sense and feel for value matters in any business. The past few years, the horse market has been red hot—blazing lava flow hot. That’s true across Western Performance Horses, Quarter Horse Racing, and Thoroughbreds. I assume the same is true for other sectors—dressage, halter, chariot—but I’ll stay in my lane.
As a certified equine appraiser, I’ve been paid by insurance companies to perform valuations and have testified as an expert witness in legal matters. I’ve also put my own skin in the game—feeling both the thrill of success and the sting of loss.
One truth has never changed:
Never take advice from someone who doesn’t make a living doing it.
True yesterday. True today. True forever.
When the Market Gets Hot
I get calls every week from customers and friends asking for my take on the market. A couple dozen called me just last month about the Teton Dispersal Sale. It was a spectacle—historic.
Let’s not talk specifics about horses or buyers, but let’s unpack some ideas.
Because one horse sells for $1,000,000 doesn’t mean your similar horse is worth that. It also doesn’t mean an insurance company will insure it for that number. Insurance companies assess risk—it’s a business for them too.
There was a mare that sold for $5,000,000. Was she worth it? To the buyer, absolutely. If I were in his shoes, I would have bought her too—a once in a lifetime offering, which pride of ownership would be immense. If you can afford the best and you want to own the best, why not? Time will tell whether that was the greatest young mare offering in history. For now, good for him. She’s in great hands.
Follow the Money (and the Math)
In investigative work, there’s a saying: Follow the money. It usually points to fraud or crime, but in horses, I just say: It’s only math.
You hear the big numbers:
“Did you hear that stud sold for $13,000,000?”
“Did you see that one brought $5,000,000?”
I’ve learned not to react to those numbers right away. Why? Because unless you’re directly involved, you don’t know the full story. You might say, “Shane, that’s what it said on the sale board.”
Maybe. But let’s do some math before we celebrate.
A $5,000,000 Stallion
Let’s assume this hypothetical:
- Purchase price: $5,000,000
- Stud fee: $5,000
- Mares bred per year: 150 (which is a lot if you really know breeding)
- 80% live foal rate: 120 foals per year
Gross annual income: 120 × $5,000 = $600,000/year
Ignoring expenses (which are significant), it would take:
$5,000,000 ÷ $600,000 = 8.33 years to break even.
Now, add real-world costs: feed, staff, marketing, insurance, vet care, etc.—let’s estimate $150,000–$200,000 annually. You’d expect that on a $5,000,000 breeding stud.
That brings net profit down to roughly $400,000–$450,000/year, stretching the break-even timeline to 11–12.5 years minimum.
And that assumes:
- Full books every year (no drop in demand)
- Zero injury or fertility drop
- Constant $5,000 stud fee
- No rebreeds beyond the norm
- Another key metric, not taking into account the cost of capital.
So, you can safely say:
“If he has 80% live foals and zero expenses (which we all know isn’t reality), it would take over eight years just to break even. Add in real-world costs, and you’re looking at twelve years or more before the books balance—assuming the demand holds.”
And here’s the kicker: most stallions start breeding around four or five years old.
If it takes twelve years to break even, he’ll be sixteen or seventeen by the time you get there—just as fertility and demand can start to decline. A breeding stud is not a robot.
The math isn’t just tough—it’s nearly impossible. The breed fee would have to be significantly higher, the book larger, or the purchase price lower. If it is an investment.
Perception vs. Reality
Sometimes, horses are sold before the auction and still run through the sale. Why? Marketing.
Example:
A buyer and seller agree on a $2,000,000 private deal before the sale. Then the buyer decides to run it through the auction and “buys” it for $5,000,000.
Let’s break it down:
- $5,000,000 sale price
- 8% commission = $400,000
- Seller gets $2,000,000 (less fees)
- Buyer effectively buys back his own horse for $3,000,000
- Commission on $2,000,000 = $160,000
- Commission on $3,000,000 = $240,000
The difference between those commissions—$240,000—is the real cost of “running the value up.”
Sounds crazy? Maybe. But think of it as a marketing expense.
Because if that bump in “perceived value” helps sell more than 48 breeding contracts ($5,000 × 48 = $240,000), the math works. The expense then becomes profitable in the end.
Is it illegal? No.
Is it ethical? That’s a fair question.
Yearling Sales and the Same Principle
The same applies at yearling sales. As an appraiser, I might see one I’d peg at $50,000—tops. A truly great individual. Then it sells for $250,000.
Could it legitimately be worth that? Yes. Could it also be another marketing play? Absolutely.
The commission difference between those numbers is just $16,000. If that perception helps sell four extra $5,000 stud fees, the math checks out again.
Perception creates demand. Perception sells.
But performance and time are the only things that sustain value.
Closing Thoughts
At the end of the day, markets rise and fall. Reputations come and go. But math doesn’t lie.
The headlines that make all the buzz are not—and never have been—the business. The business is in the middle.
The auctions I’ve seen over the past several years show that the middle is healthy and sustainable. As a horseman and businessman who feeds my family by and through horses, that’s very good news. Bullish on our future.
Perception might create a price, but only performance and time create value. That’s true whether it’s horses, real estate, or life itself.
At the end of the day, the horses don’t know what they’re worth – that is up to us. The real question is whether we still do.
Disclaimer:
The thoughts shared here reflect my own professional perspective after decades of experience in the horse industry. They are not accusations against any person or company, but rather observations about market behavior and valuation trends we can all learn from. The goal is to educate, strengthen, and grow our industry.
