This might be country specific, I live in UK.
Near to where I live there is a large paddock with 10 horses on it. Sometimes they are being moved by truck to another paddock and this one stays empty.
Land value in UK is extremely high. There was something like 4 foals this year. Horses require care, work and feeding through the winter.
These are not arabs that will win championships, more like dirty ponies.
How does this business make any sense?
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Because they are able to sell these horses for a lot of money.
For the mayority of horse owners they are a hobby and people are willing to spend a lot of money on hobbies.
I can’t explain fully, but bear in mind you can raise horses on green belt that you could not build on. Horses are very valuable, and what look to you like dirty ponies could be purebred native species. You’re right that they are very expensive to keep, and i think very few people get rich raising horses.
It might be that it’s a “for the love” business, where the owner just loves horses and works long hours for little to no pay.
It’s that way with a lot of hobby businesses.
But there sure is a market for horses, and the big breeders do make commercial sense.
The value of grazing land isn’t that high but I imagine this is more of a hobby. People who own horses love horses – they are indeed expensive to keep. They will make some profit on a foal but not much.
They could be sired by a well known race horse in which case they could be worth hundreds of thousands/millions. But alot of the studs around me (one of the main racehorse centers in the uk) are owned by people not directly connected to the equine industry and its more of a hobby to them but some are also serious businesses