Mold metabolites and mycotoxins can poison a horse. It can also affect people who handle the hay. If you use round bales, get rid of the hay on the outside. A non-toxic preservative, such as proprionic acid, can be a good way to prevent mold. Make sure whatever preservative you buy is safe for horses.
Some molds can present toxic problems even before the hay is cut.
The mold Rhizoctonia leguminicola is noted as a black patch, especially on second-cutting red clover and sometimes other types of legume forages. When eaten, it releases a toxin that stimulates the salivary glands, and to a lesser extent, the lacrimal glands. Along with drooling, increased urination and increased defecation to the point of diarrhea may also occur. It doesn't take very many blister beetles to poison a horse. These insects are especially a problem in alfalfa hay that is crimped when it is cut.