It’s almost time for the select sales of 2-year-olds in training to begin, and I’m approaching this particular cycle in the selling season with a little bit more optimism than a year ago. The recession-battered auction business is still struggling, but it’s been beaten down so far that the stage is beginning to be set for a rebound. However, it will be a subtle one, at least as far as the select juvenile auctions are concerned. And you’re probably going to have to look beyond such key business figures as gross, average price, and median to find signs of improvement.
Pinhookers, as a group, bought fewer horses last year. The Ocala Breeders’ Sales Co. February auction is smaller, and other sale company officials I’ve talked to are saying their catalogs also will down in numbers. That means a likely drop in gross revenue. In addition, nobody is predicting a big upswing in average or median.
How can this possibly be good? Well, it won’t be, at least compared to the glory days of the auction business in the previous decade. What you need to watch closely, instead, is the bottom line for yearling-to-juvenile pinhookers, who provide most of the horses offered at sales of 2-year-olds in training. Will more of their horses be profitable? Probably so. The diminished supply on offer will help, putting it back more in line with buyer demand. Another factor will be the money on average pionhookers spent for their stock as yearlings, and that was less than it was during the last sale cycle. Even if juvenile auction prices remain steady or fall, pinhookers should be better off financially than they were in 2009, when they were offering horses they purchased before the Thoroughbred market crashed in an environment that closely resembled financial Armageddon.If pinhookers’ profits improve, they’ll approach the 2010 yearling market more enthusiastically, giving it a boost. They’ll appear in the Thoroughbred Sales section of Bloodhorse.com. Another statistic to watch is the buy-back rate or the percentage of 2-year-olds that find new homes.
Getting rid of inventory is important, so that pinhookers can concentrate more on buying new stock than on trying to sell what they’ve gotten stuck with, which was a big problem following the 2009 select juvenile selling season.
This year, we will be tracking pinhookers’ profits online, publishing a report after each of the five major select sales of 2-year-olds in training in California, Florida, and Kentucky. We’ll also report on cumulative figures throughout the season. Here’s hoping the news will be good.
