Foals with normal anatomy and function of the soft palate and throat have a physical barrier between the nasal passage and the mouth. But if there is dysfunction or an anatomic problem in this barrier, milk may come out of a foal's nostrils after nursing.

This observation is commonly associated with "dummy foal syndrome" (Hypoxemic-Ischemic Encephalopathy), in which the swallowing reflex is disrupted because of poor brain and nerve function. Swallowing requires coordinated neuromuscular activity, and neurologic dysfunction often shows up as interference with normal swallowing.

Cleft palate, the incomplete formation of the wall between nasal passage and oral cavity, as well as esophageal blockage or dysfunction can also cause milk to reflux through the nostrils.

This sign can also just be seen in foals that are very weak, for a variety of reasons.