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Fasig-Tipton Saratoga Review

There is a French saying that translates as something like "the more things change, the more they say the same." Plenty has changed in the macro- and micro-economic climates since last year's Fasig-Tipton Saratoga yearling sale, but despite the various undercurrents, as far as numbers sold, totals, and average, we ended up more or less in the same spot as 12 months ago (108 sold against 107, and gross of $31,870,000 and average of $295,093 against $32,000,000 and $299,065).

On the heels of a rising market for 2-year-olds in training and a Fasig-Tipton July sale that saw the average and median rise by 10% and 20%, respectively, it looked as if the Saratoga sale might be due for a breakout. That impression continued after a first session that saw a near 20% increase on average, a 36% rise in median, and a drop in the buyback rate from 36% to 25%. Of course, after a correction on the second day, the figures dropped back to the numbers mentioned above, which are the same in many respects as last year. That, of course, is not the whole story. There was a rise in median—from $225,000 in 2012, to $250,000 in 2013—which was achieved despite a reduction in buyback to 17% for the second session and 21% for the overall sale.

Unless a market becomes really heated—and this one isn't—an increase in the clearance rate will tend depress the average (the need for sellers to achieve a degree of liquidity by selling at least something was what made the post "crash" sales look even worse). With stud fees having dropped post-2008, breeders are much better positioned to take a profit on yearlings conceived in 2012 than they were a couple of years earlier. After all, if the stud fee for a top sire in 2008 was $300,000, selling for $250,000 leaves a fair hole in the budget when all the costs are taken into account. If the cost of breeding to the same sort of horse in 2012 was nearer $100,000 then selling for $250,000 is a whole lot more palatable.

Looking at the 2-year-old in training sales and Fasig-Tipton July, if the micro-economy pointed to the potential for the upward trend to continue at Saratoga, there is at least an argument that the macro-economy indicated the same thing. Indeed, as a group, those whose financial status is commensurate with purchasing $250,000 thoroughbred yearlings not only weathered the crash, but are actually now better off than in 2008. However, while that sector may have greater ability to spend, they are tending not to do so, instead choosing to retain a higher percentage of that wealth in cash. The result, what appeared to be a decided disciplined approach to spending, may have had less impact in July, where the median was not much more than a third of that attained at Saratoga. We'd hazard a guess that the select 2-year-old sales behaved somewhat differently because the potential ROI is so much closer. So, rather than the potential inflationary scenario of more disposable income chasing fewer horses (the result of the post-meltdown drop in production), we had a disciplined group of buyers (whose mindset might also reflect the knowledge that another 3,800 or so yearlings will hit the sales ring in a few weeks' time); a group of sellers able to take profit; and a smaller supply leading to something of a flexibility by the purchasers to what is acceptable. So, rather than a boom, we ended up with a higher percentage of horses sold, for the same average, and a higher median, a result that may be rather healthier and more sustainable than a sharp rise. Now all we need is for stud fees not to start creeping back up!

Interestingly, in view of the above, the top-priced filly, a Dynaformer daughter of Indy Pick (by A.P. Indy out of the Phipps-bred Fantastic Find), was bred by Bluegrass Hall, LLC, of Brad Kelley, who is far more an iconoclast than part of the commercial mainstream. One of the country's biggest land owners, Kelley appears to love horses that have shown their best over a distance of ground, as pointed out by stallion acquisitions such as champion turf horse English Channel (TrueNicks), Melbourne Cup (Aus-I) hero Americain (TrueNicks), and Barbaro's brother Lentenor (TrueNicks,SRO). The filly, who was knocked down to Borges Torrealba (Three Chimneys, agent), is already a half sister to Kelley's tough English Channel son Optimizer, a multiple graded stakes winner of over $900,000 to date. Funnily enough, while English Channel may be similar to aptitude to Dynaformer, the duo could hardly be further apart on the physical spectrum, so it's intriguing to find a mare that can produce a significant individual to two such disparate sires.

The only other yearling to make a $1 million was also out of an A.P. Indy mare, being Hill 'n' Dale's filly by Distorted Humor (TrueNicks) who was the first foal of Cascading, a stakes-winning three-quarter sister to Rags to Riches. She was actually one of three Distorted Humors among the 10 horses that sold for $525,000 or more, and six of the top 10 were fillies, which we hope is an indicator of optimism going forward.

The New York-bred preferred sale had a significantly different shape to it, with 263 stepping into the ring over two days, as opposed to 223 the previous year. Fueled by the strength of a New York-bred program that has benefited from the long-awaited "racino" income, the gross was up from $8,622,000 to $14,206,000, the average from $62,551 to $72,480, and the median from $50,000 to $55,000, and all of that being achieved with a clearance rate that jumped up to 75% from 62% last year. If you were good-looking, vetted, and by a desirable sire, you were in demand, almost irrespective of the catalog page. The top-priced lot, a record-setting $430,000 Tapit (TrueNicks) filly, was the second foal of Miss Challenge, a stakes-winning daughter of More Than Ready (TrueNicks), but tied for second highest price at $300,000 was a War Front (TrueNicks) filly with only one stakes-placed horse in the first three dams, and another War Front filly with two blank dams realized $240,000. All told, 43 yearlings fetched more than $100,000, compared to 20 last year.

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