The Hardwicke Stud says the drought has hit their business so hard they've been forced to give away their horses.
That led to them getting caught up in an ABC investigation into the slaughter of racehorses.
A representative of the Yass stud said they were devastated by the footage and the fact their horses ended up getting killed in a Queensland abattoir.
They denied sending their horses there. Instead it was ones they'd been forced to give away.
An ABC 7.30 report claimed thousands of racehorses were being slaughtered every year for pet and human food.
It's against Racing NSW and Canberra Racing's rules for any horse to be sent to an abattoir or knackery.
The racing industry have said less than one per cent of the 8500 horses that retire every year end up being slaughtered.
Hardwicke Stud was one of a number of studs named in the report whose horses had been killed at the Queensland abattoir.
"We're caught in the middle of a drought," the Hardwicke representative said.
"Basically the market for the middle and lower end of the market for thoroughbreds collapsed last year, and feed prices doubled.
"For about three or four months we kept on feeding them and tried to find as many homes as possible.
"At the end we were giving them away and unfortunately some of them found their way to the abattoir.
"Because of the drought and other circumstances we got out of breeding horses.
"Our options were give them away or destroy them on the place. Neither of them are particularly pleasant choices."
They said older horses could survive tougher conditions, but young horses simply died.
It forced them to give away yearlings worth up to $10,000, ruining their business in the process.
To then see their horses treated the way they were on the report compounded their misery.
"Financially it was disastrous for us. These are the consequences of a drought," they said.
"We have been feeling terrible about this even before we knew they'd gone to an abattoir. It was devastating."