Shrinking Foal Crop Big 2012 Yearling Sale Performance Factor

All sorts of factors will contribute to the trends
for this year's yearling selling season, which is still in its early stages.

The American economy will be an influence and so
will the financial health of other countries. Growing purses in New York and
other states with alternative gaming will have an effect along with the quality
of the horses on offer. Weather could dampen or improve shopping attitudes and
individual shoppers could rev up or cut back their participation.

But to many horsemen, the development that will have
the single biggest impact on the market now and in the near future will be the
drop in the supply of sale yearlings. That decline is a direct result of North
America's shrinking Thoroughbred foal crops and it's expected to raise the average
price of young horses.

"Supply and demand are coming into balance and
that's going to be a big plus," said Craig Bandoroff of Denali Stud, a
well-known consignor of sale yearlings.

The number of Thoroughbreds being produced had
started to fall before the start of America's Great Recession. Commercial breeders
were making downward adjustments because of the growing realization that there
were way too many sale horses being offered compared to the number of buyers
who were interested.

 According to figures published by The Jockey Club, the biggest crop of the New Millennium so
far was the 2005 group, which had 38,361 registered members. The number slipped
to 38,091 in 2006 and there were even fewer, 37,462, in 2007.

In December 2007, this country's most disastrous financial
crisis since the Great Depression began. In September 2008, the economy
nosedived and the money woes spread worldwide. The Great Recession didn't end
until June 2009 and after that, America continued to struggle with a series of
business challenges.

The foal crop of 2008 had 35,163 horses and 32,211
were registered in 2009. The 2010 foal crop numbered an estimated 30,000.

The Jockey Club estimates that the 2011 foal crop, which includes sale yearlings of 2012,
has 27,000 members, which is down 27.9% from 2007 and 29.6% from 2005.  This year's has 24,700, which is down 34.1% from
2007 and 35.6% from 2005.

A reduction by a third is huge. If prices do
go up as expected, the number of foals being produced eventually will start to
creep back up again. But sellers, who have been paying lower stud fees
recently, should benefit from the reduction in supply for quite a while.

It's interesting to note that in the early 1990s,
the annual foal crop topped 40,000. In 1990, there were 44,143 foals in 1990,
there were 41,804.

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