The Challenge of 2009

It will be a challenging year in the Thoroughbred marketplace in 2009. While the trend of cutting stallion fees that developed this fall is good news, sellers of young horses won't be benefiting from the reductions in the short term.

Consignors of weanlings and yearlings face the daunting prospect of trying to make money with horses that were bred when the Thoroughbred auction business still was doing reasonably well and stud fees were high. Some breeders already are calling for stallion mangers to accept reduced amounts when the stud fees for mares bred in 2008 come due.

It also won't be easy for yearling-to-juvenile pinhookers at the 2009 sales of 2-year-olds in training.  When they bought yearlings, the market for Thoroughbreds was falling, but nearly all of their shopping was done before a worsening economic crisis really began to impact horse auctions. With the national and international financial pictures not expected to improve much, if at all, in the first half of 2009, pinhookers will be selling their products at a time when there will be very little discretionary income to spend on Thoroughbreds.

Many pinhookers reduced the number of horses they purchased, but spent a higher amount per horse. Their reasoning was that they would target the richest shoppers in 2009 because they would be the least likely to be affected by a struggling economy. But John Ferguson and only a handful of other buyers who shop in high six-figure and seven-figure range , and there probably will be far more quality horses available than they are willing to buy.

In recent years, many sellers of juveniles have complained about there not being enough buyers in general. In 2009, the pool should be even smaller, and that will result in a rough start to the selling cycle that begins with 2-year-olds and ends with broodmares and weanlings.

When will there be some relief? If there are any signs the economy is headed toward a recovery late in 2009, pregnant broodmares carrying foals bred on reduced stud fees might bring prices that are more pleasing to their consignors. But in all likelihood, any significant recovery for the Thoroughbred marketplace won't take place until 2010 or even 2011 or 2012 because, while lower stud fees will help, there needs to be a considerable reduction in the number of sale horses to bring supply more back more in line with demand and that's going to take time.

You won't need to turn on your television to watch a hotly-contested game of "Survivor.' You can just peek over the fences of the farm next door.

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