The Challenge of 2009

re: The Challenge of 2009

Alfred Nuckols, Jr. — Wed, 07 Jan 2009 03:49:32 GMT

To Pat:

You mention those yearlings that brought 5-6x stud fees. How many of those were there compared to the number that brought 1x or less by that same sire? If you study the sales summaries, you will see a whole lot more horses losing money than making money.

Michael Beach is correct in his analysis. The sales have become a beauty contest with stud fees reflecting what a stallion's top produce bring with no correlation to what that stallion's produce is worth on the racetrack from the standpoint of what it can earn.

This is why owners put up 3 billion a year to earn 1 billion.

Stud fees need to be reduced further to reflect their offsprings' ability as racehorses, not sales horses. Then breeders could possibly make a better return for less money risked when they go to market. And, just maybe, a single owner instead of a partnership of owners could afford to race a horse again thereby creating a larger pool of buyers for a better priced product that creates a better situation for all involved.

re: The Challenge of 2009

da3hoss — Tue, 06 Jan 2009 20:26:24 GMT

I thought these posts were approved by moderators? I come here to talk horses, not political diatribes..there are plenty of forums for that.

touchstonefarm, really good post.

The racing world is a lot like the housing market...and the bubble of stallion/auction value has burst.

Mitch degroot...there is bound to a very difficult time as the racing market is forced to address/adjust breeding practices to the unwanted, underperforming race horse, especially with a lot of the public paying attention. Can't blame the lack of kill houses for the excesses of "breed many for the one" and trust me, the rescues have always tried to "do good"...I've heard the excuses for 20 years and no one producing the "too many" changed their behavior while the slaughter houses were there to take care of their "problem"...

re: The Challenge of 2009

mitch degroot — Thu, 01 Jan 2009 19:34:16 GMT

With the crashing horse market, what will become of all these use less and unwanted horse with the killer market gone? I hope all the do gooder's step up and take them on.

re: The Challenge of 2009

slyder — Tue, 30 Dec 2008 13:37:14 GMT

The dirty hand's of the Bush Administration have reeked disaster on everything in the world including the Horse Racing Industry. Horse racing is all about the mighty or in this case not so mighty buck and we can only pray it survives the worst administration in the history of this country.

re: The Challenge of 2009

youngin — Tue, 23 Dec 2008 18:19:15 GMT

Does anyone know who the horse is in the 2008 November keenland sale photos on bloodhorse. The photos is also the second in the photos of the sale. It is the photo whith the almost back looking colt or filly on it. There is a tree in fall colors next to the horse being led. It is a horse in the sale, and you can't see the hip #. There's something I really like about the horse in this photo. Just want to watch it for the future.

re: The Challenge of 2009

m palmer — Sat, 20 Dec 2008 04:06:39 GMT

The stud fee of stallions have been a joke for some time. How can Invasor a HOY on two continent, winner of races on three, unbeaten in the US, earner of $7M be priced at $35,000 and Smart Jones &, Bernardini $100,000? Ghostzapper ran a mile in 1:33 1/5 and one and a quarter mile in 1:59.02 and was retires to stud for $150,000. Candy Ride ran a mile in 1:31 flat and one and a quarter mile in 1:59 flat and was retires to stud for $12,500. If true champions can be priced at $35,000 and $12,500 respectively then the market has been overpriced for a long time and is now correcting itself.

re: The Challenge of 2009

NEVERKICKYOURDOG — Thu, 18 Dec 2008 18:07:55 GMT

-2008-MICHAEL BEACH PREVIOUSLY STATED STALLION FEES/BREEDING BUSINESS WAS A PONZI SCHEME...ALONG CAME BERNIE MADOFF &

-2009-FASTEN YOUR SEATBELTS BUT MAGNIFICENT OPPORTUNITIES...LAST ORGY IN DUBAI...BETTING ON HORSES AND BECOMING A BETTER BETTOR WILL BE A MEANS OF SURVIVAL FOR MANY

-2010-TRIPLE CROWN WINNER; SHEIKH MO DISPERSAL SALE("EVERYTHING GOES"); RACING'S RENAISSANCE UPON US

-2011-MOST INDIVIDUAL OWNERS IN A GENERATION, PARTNERSHIPS WILL CONSIST OF 3 OR 4 FRIENDS WHO LIKE RACING AND TRUST EACH OTHER

-2012-CURLIN WILL HAVE LOOKED WELL-PRICED AT $32,000,000; LEWIS MICHAEL WILL BE THE HOT SIRE

re: The Challenge of 2009

makarra — Wed, 17 Dec 2008 16:26:26 GMT

To TouchStone: I agree 100% and thank you for a very insightful post. I believe that the first good news will be in July at the Fasig-Tipton Sale, probably lower numbers than last year but not down the percentages that we saw in November. I went through the crash of the 80s and belong to category c in your post. Career horse people, whatever their niche, will survive by readjustment. Stud fees, if not substantially less, are kinder in terms for 2009. I am comparison shopping and will not book mares until January, and terms are all important. Pinhookers have already adjusted, as seen by the lower weanling prices. Those of us who make our living in Thoroughbreds, whether breeding, training or pinhooking will continue to readjust and regroup and buy, breed, and race. The speculators will probably drop out but I believe the glass is half full for next year.

re: The Challenge of 2009

Pat — Wed, 17 Dec 2008 15:46:45 GMT

"Some breeders already are calling for stallion mangers to accept reduced amounts when the stud fees for mares bred in 2008 come due".

Funny how in years past these very same breeders never called the stallions managers to offer some more money when their babies sold for five and six times the stud fee.

Horse breeding is not a business for those in short pants.

re: The Challenge of 2009

TouchStone Farms — Wed, 17 Dec 2008 02:48:43 GMT

As usual when economic down turns occur "the sky is falling crowd"

gathers to avail themselves of anyone who will listen to their forecasts. I will not take anyones time repeating the obvious - in fact the common news that every cnbc watcher is armed with is repetitive by the very nature of its content. However I will comment on the glass is half full facts.

1) Never in the history of the US economy has liquidity been dumped into the system as it has been this year.

2) The liquidity has not even begun to gain traction yet and will do so by the end of the first quarter with a torrid recovery in the housing sector leading the way.

3) The economy's biggest problem will inevitably be inflation because in fact it will be on fire from the liquidity pumped into the system, low mortg rates,new jobs,and a massive up-swing in exports because of the currency devaluation,and Wall St entering a new multi year bull market phase.

This will be in play by the end of the second quarter.

Our thoroughbred market must be broken into four quadrants:

a) Lower quadrant, this quadrant will be devastated - its a part of our industry that never should have come to pass in the first place this is the "breed nothing to nothing and hope to get something level"

b) The second quadrant will have already sustained serious losses in 08 and will have ejected the financially unsound. Whatever percentage of these people that are left will move up in quality or leave the industry.

c) The third quadrant will take less in the way of profit temporarily, but are financially sound career horse people and will adjust their program to reflect the changes in economics and continue doing business as usual through all business cycles up or down.

D) The fourth and final quadrant will continue business at the upper levels buying & selling for less or more which ever way the pendulum will swing.

As for September 2009 we will have come through the standard 16 month period designated for recessions and I expect to see a small strengthening in the market because of the improvement in the economy and a leaner trimmed down version of the sales. It will take two years for the industry to right itself completely, this is not only irreversible but neccessary, for our survival. The fringe element needs to evaporate and the yearling sales need to return to the three to four thousand level with an emphasis on quality. The breeders will have to be more responsible rather than allowing their sires to cover any mare because its owner has the price of the stud fee in his hand. The bloodstock agents will have to be more forthright with their representation of livestock especially with new people to the industry and the consignors can improve ther business practices by representing thier client base equally without preferential placement especially if that placement is for their own interest......the way I see it!

re: The Challenge of 2009

Michael Beach — Tue, 16 Dec 2008 21:42:03 GMT

The economic equation in the horse racing business is distorted from the lofty sales revenue of past auctions. Fact is there needs to be a correlation between the sales price & expectations of racing revenue....Not a correlation between breeding revenue & auction revenue. Simply put, the breeding game must expect prices to come way down to put some sanity in the economic equation. Remove the Dubai money and see what happens...