Even though the stock market has been enjoying a recent rally, buyers and sellers of young horses aren’t expecting a similar rebound in yearling prices. Heading into the Fasig-Tipton Kentucky July select auction, which kicks off the 2009 yearling selling season, some people were predicting further downturns of 30% or more in key business figures, mainly because the health of the overall economy, here and abroad, remains weak.
“Most of us have lowered our sights,” said consignor Fred Mitchell of Clarkland Farm. “If we get 30% less than we expected, we’re still going to be satisfied. We used to say we wanted to get three times the stud fee, but this year, if we get two times the stud fee, we’ll probably be lucky.”
There are 494 horses in the sale’s catalog, which is 13% smaller than it was in 2008. Fasig-Tipton officials said they had more yearlings to choose from this year, but tightened their selection standards in an attempt to raise the quality of the horses offered in the sale, which is scheduled for July 20 and 21 in Lexington.
“We’re on pins and needles,” said seller Jody Huckabay of Elm Tree Farm. “I think you’ve got to anticipate that the sale is going to be down 35% or 40%. It’s a scary time.”
In an effort to pump up business, Fasig-Tipton management increased the percentage of horses sired by veteran stallions in the auction and focused on recruiting more trainers as buyers.
“We’ve made a real effort to attract trainers; we’ve helped them with their expenses, and we’ve got a lot of them coming in,” said Fasig-Tipton chairman Walt Robertson. “We need them here, and they need horses to move forward; that’s their lifeblood. Let’s just hope they bring enough money. I’m certainly real happy with our horses, but like everybody else, I’m tentative about the market.”
One of the July sale’s most important buying groups, yearling-to-juvenile pinhookers, saw their profits drop significantly earlier this year when the results for the select sales of 2-year-olds in training declined 30% or more.
“I have significantly less money to pinhook with this year,” said Kentucky bloodstock agent Pete Bradley. “Usually, I come into this sale hoping to buy five or six horses. This year, I’m coming in here and if I see 20 I’m in love with, I’ll put prices on them, but I honestly don’t care if I don’t go home with a horse. That’s just my attitude right now. I’m going to be very careful.”
Florida pinhooker David McKathan’s buying strategy will be similar to Bradley’s.
“In the 2-year-old market, there’s not a real middle or bottom market; it’s all top end, and even the top end is a depressed market,” McKathan said. “We’ve got to turn a profit, and spending a lot of money on horses is risky. Speaking for many of my colleagues, we’re going to cut back on the number of horses we buy and how much we spend for a horse. Every business in America is having trouble getting financing right now, and we’re no different.”
But not every buyer was approaching the July sale with caution.
“We’re ready to go,” said Terry Finley of West Point Thoroughbreds. “Our business is as good as ever, and we’ve actually seen a little bit of an uptick, so we’re here; we’re excited; and we’re going to be as active as we’ve ever been. There are going to be races in 2010 and 2011, and there’s still going to be a Kentucky Derby (gr. I) , a Kentucky Oaks (gr. I), and a Breeders’ Cup, and we want to be part of those races.”
The July sale will begin each day at 10 a.m. (EDT).