Breeding Thoroughbreds for the commercial marketplace always has been a risky venture. Sometimes Mother Nature doesn't cooperate and the result is a crooked foal. Sometimes the stallion chosen goes from hot to cold by the time its offspring are ready to sell as yearlings. Sometimes the result of a mating gets sick or hurt and is unable to be sold at the time planned.
But recent economic woes and the Thoroughbred industry's own problems have made breeding horses to sell downright treacherous. Too often in 2010, consignors of yearlings found themselves in the position of offering horses that people were willing to pay only the bare minimum for or that nobody wanted at any price.
"When they don't want them, it seems like you are out there on the island in the middle of the Pacific (Ocean) and there's no sighting of airplanes, boats, or anything. You're really out there by yourself," said Marty Takacs of Belvedere Farm during the Fasig-Tipton Kentucky October yearling sale.
Allan Lavin of Longfield Farm described the situation this way during the Keeneland November breeding stock sale: "What you can lead into the ring as a yearling and get a very poor reception for is scary. You can lead in a better than average or very decent yearling and nobody cares.
"When I was a kid, what a yearling would bring was like walking down the stairs. It was a staggered, gradual decline. Even with the C minuses and Ds by good stallions, there was a bottom to what they would bring. You could get close to getting your stud fee back. Now it's like falling into an elevator shaft. You can't buy a mare and say, ‘I've got a pretty good idea what I can get for her yearling.' If you take the spread on top sires -- the high and low on what their yearlings bring -- it can be from $1 million to $8,500 and that's the very best stallions in Kentucky."
Based on those comments, it wasn't surprising that the Keeneland November sale, the country's biggest commercial source of mares, suffered downturns in gross and average price for the third year in a row and a 15% decline in median price from 2009.
Lavin believes reductions in the foal crop will give commercial breeders a better shot of making their business work financially. But as long as purses continue to decline at the racetrack, buyers are going to be extremely cautious about which yearlings they purchase and take fewer risks. Relief for commercial breeders won't come quickly and lower stud fees aren't the entire solution.
"I think the market is following the sport; it's not following the economy," Lavin said. "When the Dow (Jones Industrial Average) was at 14,000, the market (for Thoroughbreds) was beginning to slacken. I don't think we give enough attention to the sport's failings, its loss of traction, and its lack of visibility. Until racing a more exciting attraction and a better form of entertainment, I think we're going to see a continuation (of problems in the auction business). The foal crop falling is a good thing. But it doesn't matter how small the foal crop is if we don't increase participation in racing."