Horse breeding in Minnesota is a high-risk, high-reward business

On the seventh day of his vigil, Scott Rake hovered over his laptop and rubbed his bleary eyes. His mare, Peaceful Sky, should have given birth by now — and with her pregnancy at 340 days and counting, he was trying his best not to worry.

Rake, his wife, Angie, and farm manager Heather Haagenson began monitoring Peaceful Sky 24 hours a day once her udder started to swell and she became restless. Haagenson slept in the barn on a pair of chairs. The Rakes kept the laptop on the kitchen counter at their farm near Elko, scrutinizing every twitch of the mare's tail and every toss of her head via the webcam in her stall. Night after night, Rake stared at the screen until 1 or 2 or 3 a.m., then took the laptop to the bedroom so he could sneak in a few minutes of sleep.

"This is really rare,'' he said, as the anticipation crossed into a second week. "She's really holding on to it. That probably means it's going to be a boy. And it's going to be big.''

After milking the suspense for one more day, Peaceful Sky ended it quickly once she finally lay down and groaned. It took only about 20 minutes from the time the first tiny hoof appeared to the moment Haagenson eased a warm, wet, long-legged baby into the straw, just as the evening sun was beginning to fade.

"It's like Christmas,'' Rake said, as he took pictures with his phone. "What did we get?''

"Three white socks,'' Haagenson replied. "It's huge. And it's a boy.''

Caught up in the euphoria, Rake glanced across the barn aisle at his other new arrival — a 3-month-old filly — and blurted out the hope stoked by the birth of every thoroughbred racehorse. "Great,'' he said. "One for the [Kentucky] Derby, and one for the Oaks.''

Far from the bluegrass, during the fitful Minnesota spring, the arrival of every new crop of foals renews grand dreams for breeders like Rake. It's a business that can be as brutal as it is beautiful, requiring good fortune — in the form of money, as well as luck — to produce even a winner at Canterbury Park.

Dave Astar, a breeder from Hastings, estimated it costs nearly $23,000 to breed a foal in Minnesota and raise it through its first year. That investment can grow to more than $54,000 before the horse ever runs. But of the 196 thoroughbred foals born and registered in the state this year, about 25 percent will never even make it to the track.

The sport's tenuous economics in Minnesota make it a financial gamble even when horses do reach the sale ring or starting gate. Astar said relatively low auction prices and earnings potential for state-bred thoroughbreds are suppressing the industry, stalling a growth spurt sparked by purse increases at Canterbury Park.

"We love to do this,'' said Astar, an authority in statistical analysis who studies the breeding and racing industry. "But the economics are really quite awful. It's a real struggle.''

That doesn't deter Minnesota's thoroughbred breeders from taking significant emotional and financial risks year after year, driven by the pursuit of that once-in-a-lifetime horse. For Rake, perhaps it would be Peaceful Sky's foal, who already looked the part.

The baby was trying to get to his feet only half an hour after taking his first breath. Within an hour, he was tottering around the stall, showing off his broad shoulders and stout legs.

Rake fetched the bottle of champagne that had been chilling for eight days. In the twilight, he raised a toast with a red cup, repeating a saying that reflected the boundless faith rekindled with every birth.

"They're all Kentucky Derby contenders,'' Rake said, "until you find out they're not.''

The empty champagne bottle still sat in a bucket when Dr. John King noticed something amiss with the colt's right hind ankle. King, who came to examine the foal the day after his birth, wrapped the baby's crooked leg with a bandage and suggested sending him to a veterinary hospital for precautionary X-rays.

"This is how it goes,'' Rake said. "None of them is born perfect. Even if everything looks that way, you're always waiting for the other shoe to drop.''

With more than 20 foals born at his farm since 2006, Rake has learned how to roll with the gut punches breeding can deliver. His five broodmares produce horses he raises and races at Canterbury Park, like many farms around the state. Minnesota also is home to commercial breeders who raise foals to sell, as well as "thoroughbred nurseries'' that specialize in caring for broodmares and delivering babies.

A 2016 survey by the Minnesota Racing Commission counted 214 racehorse breeders in Minnesota. Deb Hilger, who used to assist with 25 births a year at her Bleu Valley Farm near Stillwater, said it takes patience, resilience and around-the-clock commitment.

From mid-January to mid-May, Hilger helped deliver babies in the middle of the night; called the veterinarian when a foal was breech or needed a plasma transfusion; and soothed first-time mothers in distress. Thoroughbreds are fragile animals — Hilger's husband, Jeff, called them "eggshells waiting to break'' — whose births and infancy can be fraught with complications.

"People see the babies frolicking in the pasture, and it looks so beautiful,'' said Hilger, who has bred Canterbury champions including Bleu Victoriate and Chick Fight. "It's not as romantic as people think. You have to have an extraordinary amount of passion and dedication.''

Time and money are essential, too. The planning for a foal begins long before the mare is even bred, with hours of pedigree research to choose a stallion that will be a good match. The pregnancy will last 11 to 12 months. Some horses are not ready to race until they are 3 years old, meaning owners can wait as long as four years to find out whether their investment will bear fruit.

All of that work can end in exhilaration, emptiness or something in between. Cheryl Sprick and Richard Bremer of Lake City won Canterbury's Northern Lights Debutante last summer with their homebred filly Shipmate. The next day, one of their yearlings drew the top price, $50,000, at the Minnesota Thoroughbred Association's annual sale.

This year, five of their horses died in a three-month period — including a broodmare, two foals and the yearling they expected to run in the Northern Lights next year.

"You have to be a risk-taker to do this,'' Bremer said. "We also raise apples, and it's the same. You can do everything right and have a beautiful crop — and then five minutes of hail, and the whole crop is gone. It can go bad really fast.''

The highs and lows sometimes happen all at once. Dean and Teresa Benson, who operate Wood-Mere Farm near Webster, are hand-raising a filly who was orphaned when her mother died of colic. But the spring also brought some of the greatest excitement of their 40-plus years in the business.

Hold for More, a horse they bred and sold, became the leading money-winner in Canterbury history with a victory in June. A month earlier, the Bensons nearly had a Kentucky Derby connection when Malagacy — born to one of their broodmares, Classiest Gem, just before they bought her — qualified for the Derby but did not run.

"So many things can go wrong,'' Dean Benson said. "We've bred some pretty nice horses, and we've bred others that couldn't beat a fat man running downhill. You just do the best you can and hope it goes well.''

Rake knows the feeling. He has bred Canterbury champions Bourbon County and Sky and Sea, a daughter of Peaceful Sky, as well as horses that never lived up to their genetic potential.

When X-rays showed no serious issues with his new foal's ankle, Rake was free to dream again of what the future might hold. He already was looking down the road, too. In late May, with the baby less than three weeks old, Rake loaded him and his mother into the trailer for a 13-hour drive to Coolmore Stud in Kentucky — home to Triple Crown champion American Pharoah — to breed Peaceful Sky to the father of her next baby, the young stallion Air Force Blue.

It's a joke that never fails to draw a rueful chuckle from breeders, thanks to its uncomfortable proximity to the truth. How do you make a small fortune in the horse business? Start with a large one.

"People used to ask me, 'Do you bet on your horses?' '' Jeff Hilger said. "I told them, 'Yeah. On the day they're born.' There's only one way to be in this business, and that's to really, really love it.''

The Hilgers, who once had 14 broodmares, now have only one. The enormous workload and costs led them to cut back, and with the challenging economics of breeding in Minnesota, they have seen others do the same.

Declining purses at Canterbury Park and uncertainty about the track's future caused the state's registered thoroughbred foal crop to plunge to an all-time low of 96 in 2012. When the track signed a 10-year, $75 million purse enhancement deal with the Shakopee Mdewakanton Sioux Community, the crop shot up to 246 the following year. But the numbers still lag behind the pace set in the mid-2000s, and only 19 stallions are standing in the state, the fewest ever in statistics that date to 1985.

Astar said Minnesota's breeding industry is not set up to encourage growth or maximize economic benefits. To qualify as a Minnesota-bred, a foal must only be born in the state; it can be sired by any stallion anywhere. There are few incentives to stand quality stallions in Minnesota, and when breeders send their best mares to more prominent stallions elsewhere, it reduces the amount of money spent on breeding activity here.

The breeders' fund, which pays bonuses to Minnesota breeders, is unpredictable, complicated and less lucrative compared to many states' programs. And in 2015, Minnesota-bred horses earned an average of $13,569 in purses — lowest in the Upper Midwest. Canterbury Park, where Minnesota-breds make nearly all their earnings, has a relatively short season and paid 31 percent of its 2015 purses to state-bred horses, a smaller cut than several competing states.

The math isn't any more encouraging for those who sell their horses. Last year, at the Minnesota Thoroughbred Association's annual yearling sale, the average sale price was $10,558.

"Your cost is going to run $23,000 if you breed and try to sell, and it's about $40,000 if you want to run that horse at 2 years old,'' Astar said. "And what do you get? You average $10,000 if you sell it. And if you race, the average state-bred horse in Minnesota has lifetime earnings of $20,000 to $25,000.

"I love Minnesota, I love racing and I love breeding. But you can't do much more with it here. Because of the economic conditions, we're minimizing our footprint in the state.''

Astar used to breed eight mares, but he cut back to only one this year. In the future, he plans to send mares to foal in other states with better potential returns.

Some breeders remain optimistic that Minnesota's economics will improve. Rake noted there are other rewards, too. In mid-June, after Peaceful Sky and her foal returned from Kentucky, the baby — now called The Kid, in honor of Prince — ran up to him in the pasture and nuzzled his arm.

"It's about more than money,'' Rake said. "It's about foaling at your own farm, being there when the babies are born, seeing them take their first steps. There's nothing like it.''

During his time in Kentucky, The Kid's ankle grew stronger and straighter. He would not need surgery, and the Rakes noticed how quickly he was adding muscle as he dashed around the pasture with Camille, the baby filly.

A month later, they were grieving. The Kid spiked a fever of 104 degrees on a Sunday night and was taken to a veterinary hospital as a precaution. The foal's condition rapidly deteriorated; at 2 a.m. on July 26, he died, leaving the Rakes in shock and Peaceful Sky so distraught she had to be sedated.

The couple never had lost a foal so young. To make matters worse, they discovered a few weeks earlier that Peaceful Sky had lost the baby she conceived in Kentucky — and it was too late to breed her again. On a white board in the barn, where Haagenson already had recorded the due dates of the five babies expected next year, a line had been drawn through the final one.

Three days later, Rake stood in the winner's circle at Canterbury, presenting a crystal vase to the winner of a race for Minnesota-bred 2-year-olds. "You've just got to pick yourself up and get back to the program,'' he said, watching his fellow horsemen celebrate. "It's hard. But it's part of the deal.''

Coping with loss, Rake knew, would be temporary. The nature of the breeding business ensured it. His family's hearts would mend as their mares' bellies grew, presaging another round of waiting and watching and welcoming new life.

The farm's greatest champion, Sky and Sea, will have her first baby next year. By the time it is ready to race in 2020 or 2021, Rake is banking that Canterbury will have renewed its purse-enhancement agreement — set to expire in 2022, and vital to the track's survival — and that new revenue from internet wagering on horse racing will be pumping up the breeders' fund.

It's uncertain what will happen. But Minnesota's breeders are used to meeting risk with hope — and finding greatness, in some form, in every horse born on their farms.

"Not a lot of people get to see a foal being born,'' Deb Hilger said. "You get an intimate view of something precious. You're witnessing a miracle. And that is really, really rewarding.''

Rachel Blount • rblount@startribune.com

Aaron Lavinsky • alavinsky@startribune.com