(Originally published in the September 21, 2013 issue of The
Blood-Horse magazine. Feel free to share your own thoughts and
the bottom of the column.)
By Eric Mitchell - @BH_EMitchell on Twitter
The Keeneland September yearling sale is an important market barometer, not only for yearlings but for the commercial Thoroughbred market overall. The broad range of horses offered over 12 days provides solid evidence regarding buyers’ behavior.
Clearly the market has caught a strong wind and is now sailing upward on the growth curve. Early on the seventh day of the 12-day sale, the world’s largest yearling auction had already surpassed $219.7 million in gross sales, its total sales of 2012. The cumulative average through Sept. 15 was tracking 32.8% ahead of last year and the median price was up 45%.
As the market heats up, buyers are showing a greater willingness than in recent years to invest in first-crop sires.
During the lean years following the Great Recession breeders and buyers retreated to the relative safety of proven sires. The stud fees for entering-year stallions fell dramatically, and the commercial value of their weanlings and yearlings dropped accordingly. In 2008 the average fee for entering sires was $12,350, and stallions with their first foals had an average weanling price of $48,500, according to The Blood-Horse MarketWatch. By 2011 the average entering-year stud fee had fallen to $8,180 and the average price of the first-crop weanlings was down 25% to $36,390.
The rebounding market is driving buyers back toward young sires.
Last year WinStar Farm’s Pioneerof the Nile and Colonel John led the first-crop yearling sire ranks at the Keeneland September sale by average price. Pioneerof the Nile yearlings averaged $96,893 for 29 sold, while Colonel John’s progeny averaged $89,000 for 30 sold.
The numbers have been considerably stronger for the first-crop yearling sires of 2013, with five stallions sporting six-figure averages to date. Leading this sire crop is Claiborne Farm’s Blame, with an average of $205,057 for 35 yearlings sold. The other strong sellers are Taylor Made Stallions’ Eskendereya ($149,454, 33 sold), Lane’s End Farm’s Quality Road ($141,356, 45 sold), Ashford Stud’s Lookin At Lucky ($117,563, 32 sold), and WinStar’s Super Saver ($112,339, 31 sold).
Confidence in the market is part of what is driving a willingness to spend more on the yearlings of unproven sires. But more influential is the even sharper rise in value of the yearlings by top proven sires.
Among the top 10 sires ranked by their 2012 Keeneland September average (see the MarketWatch snapshot on page 16 of The Wire), eight have had their 2013 averages rise by double-digit percentages against their 2012 averages through Sept. 15. WinStar’s Tiznow has had the biggest rise in average price, jumping 90.1% to $343,684 for 38 sold. The two-time Breeders’ Cup Classic (gr. I) winner had two yearlings sell for more than a million dollars—a $1.75 million filly out of Silken Cat (by Storm Cat) was bought by Borges Torrealba Holdings out of the Taylor Made Sales Agency consignment, and Mill Ridge Farm sold a filly out of Easter Bunnette (by Carson City and dam of Horse of the Year Havre de Grace) for $1.7 million to Solis Bloodstock. In 2012 Tiznow didn’t have any million-dollar yearlings.
The other active North American-based sires with substantial increases in Keeneland September average price between 2012 and 2013 are Claiborne’s War Front (76.1%), Darley’s Medaglia d’Oro (69.6%), Gainesway’s Tapit (58.4%), and Darley’s Street Cry (20.5%). Even five Keeneland September yearlings offered this year that were by Coolmore Stud’s leading international sire Galileo, whose premier status doesn’t seem to allow much more room for growth, sold for 42.1% more than his five yearling progeny that sold at Keeneland a year ago.
As stated earlier, Keeneland September is a barometer for the entire industry. With yearlings becoming pricier, look for substantial growth in weanling prices in the fall and winter and a rising demand for broodmares. The foal crop is expected to be down for 2014 but that turnaround is coming, too.