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I see you didnt paper him or the mares you bred him to ; to be honest ; you should ( I know its hard in the beginning to have the HB's to do all the tests ) if he papered the same as his sire , or worse , he should be gelded and become a show pony :). You want to improve your lines and the only way to really, really do that is test everything and only breed the "higher" papered horses :)

Even my highest quality 2Gs throw a ton of foals who get altered. I can’t remember for sure now, but my original benchmark (the best of his gender & generation that I compared all my others to) only gave me a few intacts per season, especially on the beginning. I think I might have even gone whole seasons with no intacts or only one.

My other generations probably have even lower rates of passing foals, but breeding for passing (especially passing & papered up) 3Gs feels like the hardest. (Even if it isn’t)