Just a quick internet search (
https://academic.oup.com/jmammal/article-abstract/52/2/316/858311 ) shows an overview of a study that was done where dogs and coyotes were interbred in captivity. Don't think it'd happen in the wild, if it did, it would definitely be a one off for sure. I have lived in rural areas my entire life and within very close proximity to coyotes (have watched them walk across our yard through the window). We have always had dogs as well. In fact, every neighboring ranch that I can think of had dogs and we all had coyotes around, all the time. Not one instance I can think of did anyone's dogs ever get bred by a coyote. In fact, I think all the dogs would have rather killed a coyote than twist up the sheets with one and the same can be said for the coyotes. I would venture to guess this is how most all coyote and dog interactions would take place. I have definitely seen some odd colorations in coyotes and even some that just didn't look right, but not a single one of them I would ever say was a hybrid. I looked at the pic of the coyote that medic joe posted, I think even he would have to admit that it's pretty hard to tell from the pic that we all see, that it is anything but a run-of-the-mill coyote. I'd say maybe the hair looked "blue" to you and peaked your curiosity. Obviously, coyotes come in many shapes and color variations and I would have to say by the evidence I see (40 year old picture) I see nothing but a coyote. Could have been some mongrel, maybe, but unlikely.
I haven't seen or heard of a biologist having the "final say" in anything. They are typically pretty well educated in their field of study (or I would at least hope they are) and have a pretty good understanding of what goes on. With that being said, isn't it their job to learn as much about their field of study as possible? Isn't their whole career based off of science? Last I remember from science class in school was that theories are part of science and you have to prove or disprove those theories to find a conclusion. I highly doubt the pecker pull going on in this thread is proving or disproving anything.
Can they breed? Yes. (Has been proven to happen in captivity)
Do they breed outside of captivity? Maybe, but unlikely. (Has not been proven) If you want to buy a test to keep on hand to prove that a wild coyote you shot may be a "coydog", buy one to keep on hand so you can PROVE it! Yes they make them, here's the link...
Coyote-Dog Hybrid Test | Veterinary Genetics Laboratory
There you have it.
And, HELL YES, Santa is real... My kids read this forum!
