The most important thing to keep in mind about Grey is that it is not a color in and of itself, but rather is a modifying effect that is "overlaid" on top of whatever color the horse already was, genetically. A grey horse will be born looking like an ordinary colored horse -- whatever color it would have been without the grey gene. Gradually over time, more and more white hairs will appear, until eventually the horse is all white. The speed of the greying process varies from horse to horse, but typically there will be enough white hairs appearing at the time the foal-coat is shed (around 3-4 months) to be able to tell the horse will be grey, then the dark dappled grey stage is usually around age 2-5 or so, progressing through lighter and lighter stages each year until reaching the white or nearly white stage around age 15-20. Again, this does vary dramatically in some individuals, though. Rarely, some greys are already very light by 6 months old, while others show no sign of greying until they are a few years old.
The genetics of grey are very simple. At the "G" locus, there are two possible alleles -- G and g. All non-grey horses are gg, and all grey horses have at least one G. Since grey is dominant to non-grey, all grey horses must have at least one grey parent. Grey cannot skip generations. A horse with two grey parents may inherit a G allele from each of them, and be GG -- homozygous for grey. If that happens, then every one of that horse's foals will always be grey.
Researchers in England have now pinpointed the location of the G gene. Presumably, there will soon be a test available for the gene. Although most of the time it's plain to see whether a horse is grey or not, there are some occasions where a test would be needed to tell if the G gene was there -- on an all-white pinto, for instance, or a cremello, or a very roaned-out Appaloosa.
Breeding grey horses can give some unexpected results. If a horse is purchased as a mature stallion, already grey, and there is no record of what color he was at birth, you have no way of knowing what other color genes he has. He may surprise you with dilute colored foals, or pinto spots.
Grey is sometimes confused with other colors, most often with blue roan. Some greys do go through a stage in their greying that looks rather like a blue roan, but it's easy enough to tell the difference. Roans have dark heads and points (the white hair is mixed in on the body only) and they do not get lighter and lighter each year. Greys are usually lighter on the face than the rest of the body, and they change color every year until they are nearly white. Occasionally grey might be confused with grulla. But a grulla's grey-looking body color is caused by each hair being a grey color, not a mixture of white and dark hairs like a grey or roan has. Also, grullas, like roans, have dark points, and do not change from year to year.
It should be noted that some registries actually use the term "roan" to mean a particular shade of grey, and not roan at all. This frustrating practice causes much confusion.
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