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$500 isn't horribly cheap actually. It might even be a tad pricey for am mini without proven show lines and/or unusual color. You can easily buy a foal for $1k for a regular sized horse while its still young and has growing to do and training needed. Once it starts hitting its adult form and getting trained more (and possibly racking up show wins in handling/confirmation) the price will start going up. With the price of hay going up I can usually find minis for $200-300 and horses for $500-700 easy.
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