As fall wanes on toward winter and a new breeding season, breeders had one more chance to sell their yearlings at a major auction this week. Fasig-Tipton wrapped its three-day Kentucky Fall Yearlings sale with slight price declines and an improved proportion of sold horses on Wednesday evening.
This year’s auction saw 777 horses sold for a total of $25,691,500, which was down 12.5 percent from last year’s total sales of $29,369,300. The average price of $33,065 was relatively steady from last year’s October sale, while the $14,500 median was down 3 percent.
Two horses tied for highest price at $350,000: a colt by Curlin, and another by Bernardini, purchased by Stonestreet Stables and JSM Equine/Justin Casse, respectively.
The percentage of horses failing to attain the minimum or “reserve” price placed on them by consignors was 25 percent, down from about 31 percent last year.
The improved rate of horses not attaining their reserve price could be a reflection of realism on the part of sellers – even if that realism comes at an economic disadvantage for them. A reasonable number of horses going through the ring likely brought less money than it cost to produce them, but that’s part of the business.
Thoroughbreds are somewhat unique as investments, because their value can grow (or shrink) with the passage of time, their own development, and a number of market factors. Some breeders plan to sell horses as yearlings, while others have the resources to pay for the horse to start training. For those committed to the commercial route, it may be better to cash in at a loss than keep paying with crossed fingers.
“One of the things I tell folks a lot of times when they’re talking about setting reserves, they’re saying, ‘Well my cost is X.’ I really, truly tell them, ‘Your cost and the relative market value are not related in any shape, fashion or form, either positively or negatively,’” said Fasig-Tipton President Boyd Browning. “The market’s going to dictate what the value of your horse is, not your cost. If your cost is all in at $40,000, your horse might be worth $200,000 and it might be worth $10,000. That’s just the nature of the business.”
This year’s October Sale also saw a greater proportion of horses from nearby state-bred programs, possibly as a result of Keeneland growing its September sale’s catalogue. In fact, the Daily Racing Form reported the October sale had more Ohio-, Indiana- and Illinois-breds than any other yearling auction in the country. (That includes a yearling sale in Indiana.) Ohio and Indiana’s programs have enjoyed a resurgence in recent years, as revenue from slots has begun boosting purses for Ohio- or Indiana-breds running in those states.
For small, out-of-state breeders, the chance to shine at the October sale gives their horse a larger stage than they could get by remaining at home and participating in a small, regional sale. Most sellers say buyers are equally interested in a nice horse, regardless of which state program it’s from, and some may even seek out yearlings registered with particular programs. Owners who live in Indiana or Ohio are, in some cases, more likely to prefer a horse that can earn purse bonuses while running within a few hours’ drive. Both states have seen narrow increases in their shares of the overall foal crop over the past 10 years, according to Jockey Club statistics.
Browning noted increased activity from several international buyers picking up yearlings at the middle or lower end of the price scale. South Korea and Russia both have sent buyers to American auctions in recent years, as the two countries work to develop their own breeding industries. South Korea buyers initially started with capped budgets per horse, which have increased in the past two or three years.
After next weekend’s Breeders’ Cup races, the bloodstock market will move on to breeding stock and mixed sales through the winter. Fasig-Tipton holds its one-day mixed auction Nov. 7, while Keeneland will run its own Nov. 8-20. A few stray yearlings may appear in those auctions, but the primary focus will be on recently retired fillies and mares or broodmares in preparation for the coming breeding season.
Figures released by the Jockey Club earlier this month show the number of active stallions in North America has declined 1.8 percent from last year, while the number of active broodmares is down 2.5 percent. If past breeding stock auctions are anything to judge by, it could be feast-or-famine for sellers. Previous November sales have seen competitive bidding for mares at the peak of the market, while those with a significant detractor (produce record or fertility, for example) struggled to find buyers.