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Genetics work in the game like in "real life", You could breed Secratariat to a good mare and not get a "race" quality foal. Nothing is gaurunteed, just like when you breed 2 horses. The only thing you can know for sure is if you breed 2 chestnuts together, you will get a chestnut foal.

Color is generally the surest thing you can know of when breeding a horse on HAJ, and even when you have a good idea, you can get a surprise. Breeding Ability, PT score, Papers, and Consistency is never a sure thing.
However, pasture breeding a mare that has spent 30+ days in a pasture generally results in a better quality foal, but not always. Foundation stock that also have Exceptional Producing in the name of it can also throw better foals sometimes. Sometimes the individual horse also has a say in it. I've had some mares that couldn't throw a superior filly, but regularly threw superior colts. The same is true for stallions. In this way the game mimics real horse breeding.