Breeders Get a Break - by Eric Mitchell

(Originally published in the December 1, 2012 issue of The Blood-Horse magazine. Feel free to share your own thoughts and opinions at the bottom of the column.

By Eric Mitchell - @BH_EMitchell on Twitter

By Eric Mitchell

A common refrain heard among Thoroughbred mare owners at this time of the year is that stud fees are too high.

This year, however, breeders should be feeling a bit less economic pressure. A cursory glance at the stud fees announced to date by North American stud farms shows the average stud fee among 289 stallions standing for $4,000 or more has decreased 6% to $14,590, down from an average of $15,525 for the same group during the 2012 season.

An average decline is good collectively for breeding farms’ bottom lines, but during the past few years declining stud fees have been largely among stallions that didn’t possess the greatest commercial appeal.

On this front there is more good news. Among 33 stallions (excluding first-year sires) that will stand for $30,000 or more in 2013, only eight are having their fees increased while six will have their fees lowered. The stallions with higher fees aren’t going to surprise anyone.

Ghostzapper (Awesome Again—Baby Zip) leads the pack by percentage change with a fee that is doubling from $20,000 to $40,000 for 2013. The 2004 Horse of the Year and champion older horse standing at Adena Springs, however, is represented by 13 new stakes winners in 2012, through Nov. 26. His stakes winners include 10 graded stakes winners, second only to Giant’s Causeway who has 13. Ghostzapper’s top earner of the year is the outstanding sophomore filly Contested, who won the TVG Acorn Stakes and the Test Stakes (both gr. I) and who later sold for $2.3 million at the Fasig-Tipton Kentucky November sale.

Hard Spun and Scat Daddy, who are battling it out at the top of the second-crop sire list just as they did as freshman sires last year, will have their fees increased by 50% and 71%, respectively. Darley’s Hard Spun will stand for $60,000 following a year that has produced 12 new stakes winners. The son of Danzig’s top runners include grade I winners Questing and Zo Impressive. Hard Spun’s career Northern Hemisphere progeny earnings through Nov. 26 (excluding Japan and Hong Kong) are $5,609,197. He will stand for $60,000 in 2013.

Ashford Stud’s Scat Daddy is $108,718 behind Hard Spun by progeny earnings and more than $2.7 million ahead of third-place sire English Channel. The son of Johannesburg has picked up four new stakes winners in 2012 and has six lifetime stakes winners with one of those being the brilliant Daddy Long Legs, who won the UAE Derby Sponsored by The Saeed & Mohammed Al Naboodah Group (UAE-II) and the Juddmonte Royal Lodge Stakes (Eng-II). His career earnings are more than $1.33 million. Scat Daddy’s fee will rise to $30,000 from $17,500 for the coming breeding season.

Other top sires with rising fees are Awesome Again (up 50% to $75,000), Harlan’s Holiday (up 40% to $35,000), War Front (up 33% to $80,000), Arch (up 33% to $40,000), and Exchange Rate (up 20% to $30,000).

Among the top stallions with fees coming down, Darley’s Street Cry is making the biggest drop. The 14-year-old son of Machiavellian is having his fee lowered 33% to $100,000. All of Street Cry’s group winners in 2012 were overseas—Carlton House in England, Princess Highway in England and Ireland, Falls of Lora in the United Arab Emirates, and Zaidan in Hong Kong. Still, Street Cry can warrant a six-figure fee with 61 career stakes winners and three champions.

Other top sires offering breeders a break are Stormy Atlantic (down 25% to $30,000), Unbridled’s Song (down 21.5% to $60,000), Candy Ride (down 20% to $40,000), Blame (down 14% to $30,000), and Mineshaft (down 14% to $30,000).

Not much has changed price-wise among the horses entering stud in 2013. Belmont Stakes (gr. I) winner Union Rags commands the top fee of $35,000, the same top-of-the-class price placed on Uncle Mo last year and the same levied for Blame, Lookin At Lucky, and Quality Road when they entered stud in 2011.

The market is still rewarding proven quality in favor of the promise of quality.

With the weanling market a bit softer than expected, breeders should relish a year with fees largely stable or even decreasing on some of the most desirable stallions.

The industry can only keep growing if the manufacturers are making profits that can be reinvested. The 2013 breeding season should be another positive step in that direction.

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