More September Yearling Profits, But A Lot Still Don't Make Money

You can spin the profitability results for the Keeneland September yearling sale two ways. You can say, "Wow, commercial breeders are making more money, so that's a good thing." Or you can say, "Damn, it may be getting better, but how can a lot of these people hack it financially?"

The Blood-Horse analyzes the results of yearling auctions taking into account the cost for stud fees, the cost to raise the young horses produced, and the sale company's commission.

For the entire September auction, 28% of the horses offered, only about a quarter, were profitable. However, the figure was up from 20%  (a fifth) in 2011. The price to stud fee ratio was 2.60, up from 1.94 last year.

For the select portion of the September auction, which was one session this year, 52% of the horses offered were profitable. Last year, when there were two select sessions, 46% of the horses were profitable.

Falling stud fees combined with rising sale prices contributed to the improvements.

For the entire auction, the average stud fee paid to produce the horses was $31,860, which was down 14.9% from 2011. The average price the horses sold for in September was $87,354, up 14.2% from last year.

For the select portion, the average stud fee was $85,624, which was down 8.9%. The average yearling sale price was $403,867, up 14.3%.

Yes, there were a lot of smiles on the faces of consignors. But when they sat down and really looked at the numbers, you have to think their conclusion was that breeding horses and making money by selling them as yearlings is still quite a daunting challenge.

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