Fjordonomics, Part 2: Why Breeding Horses Rarely Makes Financial Sense

An opinion series based on 25 years of personal experience in breeding, buying, and selling Fjord Horses.

Many horse breeders are familiar with the old joke:

“How do you make $1 million breeding or selling horses? Start with $5 million.” That punchline, though exaggerated, carries a hard truth: when viewed strictly through a financial lens, raising horses rarely makes rational economic sense.

The Real Cost of Breeding Horses

Horses are large, long-lived animals—often living 30 years or more. They require daily care, quality feed, shelter, regular farrier work, and routine veterinary attention. Add in the need for specialized equipment like tack or harnesses, and the labor involved—whether hired or done personally—and costs mount quickly. Depending on where you live, those costs can vary dramatically.

I consider a breeder to be someone who owns two or more mares—possibly even a stallion—and aims to produce at least one foal each year. In the U.S., Fjord breeders range in size, but most have small programs. A few operate larger-scale operations, but unfortunately, our breed registry doesn’t collect or publish data on breeder size or geographic distribution.

The Farm Factor

Most breeders own or operate farms. Horses need space, and boarding multiple mares and foals is often cost-prohibitive. Breeding farms frequently supplement income with other agricultural enterprises like hay production or livestock. While this can offer economies of scale and certain tax advantages, it also brings additional overhead: equipment, insurance, infrastructure, loans, and labor.

The Long Sales Cycle

In an ideal breeding scenario, a mare is bred, conceives without issue, and delivers a healthy foal after about 340 days. That foal requires basic care and minimal veterinary intervention, and is sold at weaning—around five months old. Even in this best-case scenario, the breeder absorbs roughly 16 months of expenses: feed, care, and vet work for both mare and foal, along with their share of farm overhead and marketing.

And that’s if the foal sells early. If the breeder keeps the young horse for training—groundwork, riding, or driving—both its value and its carrying costs increase.

Price vs. Cost: They Don’t Always Align

There is pricing elasticity in the horse market. A weanling typically sells for less than a yearling. Trained horses often bring higher prices, reflecting the skills and time invested—but increasing age and training also mean more money spent on care, feed, and professional help.

I’ve seen breeders insist that their price must reflect what it cost to raise that Fjord. My response: sometimes that’s possible, but often, it’s not.

A few years ago, we had a filly born with contracted tendons in her front legs. It’s a fairly common issue that usually resolves with a dose or two of intravenous tetracycline. But not in this case. She needed casting, splints, extended treatment, and months of careful management. She never needed hospitalization, but her care cost thousands of dollars. No sale price would have covered what we spent—yet we didn’t regret it. We did it because we care.

The Role of Utility: Why Breeders Keep Breeding

So why do breeders keep doing it?

Because breeding horses offers something beyond dollars: utility. In economic terms, utility is the satisfaction—actual or expected—derived from consuming a good or service. It’s subjective, and it varies from person to person.

For breeders, utility is the joy of seeing a healthy foal stand and nurse for the first time. It’s watching that foal grow, thrive, and eventually become someone’s beloved partner. As long as the emotional reward outweighs the financial burden, people will continue to breed—even when profit margins are thin or nonexistent.

Understanding utility is essential to understanding both pricing and behavior in the horse market. Demand isn’t always logical—but it is real.

What’s Next in This Series

In upcoming parts of Fjordonomics, I’ll explore two more critical aspects of the breeding equation: Stallions and marketing.

Both influence not just the economics of breeding, but also the utility breeders derive from the process.

Stay tuned.