Salebration - by Eric Mitchell

Optimism surely would have been more muted had consignors at Keeneland known going into the world's largest yearling sale that the top buyer from last year would spend only 10% of what he did in 2011 and the second-leading buyer would buy nothing at all.

Combined, Sheikh Mohammed’s bloodstock agent John Ferguson and health care magnate Benjamin Leon Jr. spent more than $17 million on yearlings a year ago, which represented 7.6% of 2011’s gross sales.

When the final hammer fell this year, Ferguson had signed a sales ticket on only four yearlings for a total of $895,000 compared with a year ago when he had spent $8.87 million. Leon, who in 2011 had spent more than $8.17 million on 13 yearlings—including a $1.3 million Unbridled’s Song filly named Ultimate Reward and a $1.2 million Bernardini filly named Secret Jewel—was a no-show.

For a recovering commercial market, that would seem to be a significant gap to close.

Not only did plenty of other buyers step up to close that gap during the 11-day Keeneland September sale, they lifted the average price 14.2% over the 2011 average and produced a median that equaled the sale’s record, which had been set in 2006.

A greater number of buyers showing a willingness to spend more money is the most positive sign coming out of the Keeneland sale. It appears the bottom is truly behind the U.S. Thoroughbred market.

Buyers both domestic and foreign contributed to the sale's success. Among the notable foreign buyers are Russian agency Raut that not only bought 76% more horses (37 versus 21 a year ago), but spent 448% more on its purchases. The agency spent $2.62 million compared with $412,500 in 2011. Shigeyuki Okada’s Big Red Farm of Japan, which acquired two-time classic winner I’ll Have Another for stud duty earlier in the year, also stepped up its spending, buying five yearlings for nearly $1.42 million compared with 2011 when it bought only two for $150,000.

For another sign of optimism, look at the purchases of a couple of well-known pinhookers. Florida’s Nick de Meric bought only seven more horses than he did in 2011 but increased his spending to $2.83 million from nearly $1.59 million a year ago. Mike Ryan also substantially upped his spending, buying 16 yearlings for $2.62 million. In 2011 Ryan bought 11 horses for just over $1.7 million.

Charlotte Weber’s Live Oak Plantation bought only one yearling for $460,000 in 2011. This year Live Oak is the fourth-highest buyer by total purchases, having picked up 10 yearlings for nearly $3.36 million.

The profitability rate for the entire sale also rose eight percentage points to 28% compared with 2011. The level of trade overall was better, too, with 19.2% of the horses failing to meet their reserve prices compared to 20.8% who didn't find new homes a year ago. Sellers reminded us they are still not covering their production costs on many yearlings but horses are changing hands and collectively, at least, sellers are making more money.

The signs seem positive for the mixed sales in the fall and winter, when breeders may now be enticed to pick up another mare or two.

As the production cycle starts again, however, here’s hoping the industry collectively keeps the focus on quality and not quantity.

Looking for Signs

Several farm owners and managers have contacted us recently about the astrological calendar that was formerly carried in the back of the magazine on the “Reminders” page. They use the signs to identify the best times of the month to wean or castrate. The calendar has not gone away. It has been moved to a regular spot on the last page of “The Wire” news section in the front (see page 2698).

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