Japanese Market Gets Reality Check
Photo: Michele MacDonald
Hip 423 was the July 16 session's highest price at the JHRA Select sale.
Even as Deep Impact continued to set a lively pace with many of his foals selling strongly during the final session of the Japan Racing Horse Association select sale on July 16, a hard reality emerged from beneath the flashy headlines.
With the session’s buy-back rate hitting 34.2% and overall gross with the three-day sale declining by 16.3% from 2007, many breeders not associated with the Yoshida family’s titanic Shadai Group are facing a strain. Since other sales in Japan have fallen even more drastically this year as the Japanese economy struggles, the state of the industry so flamboyantly vibrant in the past now is less certain no matter how impressive the numbers for some individual transactions.
Yet when the sale ended, JRHA Vice Chairman Teruya Yoshida confided that he feared the results could have been worse.
“I didn’t expect too much, but my feeling is this is very good under the circumstances,” he said. “We can’t say it is bad. It is not a disaster.”
Even though reports in the Japanese media have suggested that Deep Impact, the Japanese Triple Crown winner and two-time Horse of the Year who was syndicated for a record 5.1 billion yen ($42.7 million), disappointed with prices for his first foals, the sale results show just the opposite.
For the second consecutive day, a son of Deep Impact topped the session, with natural foods entrepreneur Takaya Shimakawa again the buyer. This time, Shimakawa paid 100 million yen ($952,380) for a colt consigned by Yoshida’s Shadai Farm and out of the Polish Precedent mare Mill Grain, a full sister to Irish (Ire-gr. I) and Yorkshire (Eng-gr. I) Oaks winner Pure Grain.
“This is the one I wanted to buy the most from the entire sale,” said Shimakawa, whose racing stable includes more than 100 runners. “When I went to Shadai Farm, I liked this one the best and Teruya Yoshida recommended him—he said, ‘This is the best Deep Impact.’ So, I was determined to buy him.”
During the first foal session on July 15, Shimakawa paid 220,000,000 yen ($2,056,074) for a Deep Impact colt out of Japanese champion Biwa Heidi, by Caerleon, that he described as a “totally unexpected” hunch purchase. That colt ranked as the highest-priced offering of the sale, which included a yearling session on July 14.
“I’m not the horse expert—I can’t judge anything about the horses,” said the congenial Shimakawa, who has campaigned such Japanese group winners as Tosen Jouoh, Tosen Bright and Tosen Dandy. “But everyone says these are good, so I pay for them.”
The second highest priced colt on July 16 also was by Deep Impact. Consigned by Northern Farm, the dark bay is out of Japane    se Oaks winner Silk Prima Donna, by Brian’s Time, and was bought for 92 million yen ($876,190) by Riichi Kondo.
Illustrating just how powerful a force he was in the sale, Deep Impact generated 1,880,000,000 yen for his 31 foals sold—a whopping 19.5 of the overall sale gross even though he was not represented by any horses in the first session restricted to yearlings.
Among those selling foals from the first crop by Deep Impact was Runnymede Farm of Paris, Kentucky, which on July 16 sold a colt out of the Danehill mare Josette for 33,500,000 yen ($319,045). Runnymede also sold a Deep Impact colt on July 15 for 42 million yen ($392,523) and a yearling Singspiel colt on July 14 for 20.5 million yen ($191,588). Additionally, Runnymede sold a yearling Fuji Kiseki filly privately during the sale but took back a colt foal by Medaglia dOro and a colt foal by Fuji Kiseki.
Martin O’Dowd, Runnymede vice president and general manager, knows of no other Americans this year that attempted to brave the expense and volatility of the Japanese market in hopes of gaining what have been the most lucrative returns in the world, at least for foals.
“Attempting this is not for the faint hearted,” O’Dowd said, calling the current Japanese market conditions “sobering.”

“The reality is that if you are breeders to the right horses, the stud fees are not cheap and raising them here is expensive,” he said. “We were very fortunate in having the right mares for this market. It’s fruitless to attempt it unless you have those.
Runnymede is committed to its breeding venture in Japan, which consists of about five mares, a number that O’Dowd hopes to increase over time with individuals of suitable quality. Runnymede also breeds mares in England and Ireland, along with its main band of broodmares in Kentucky.
For the foal session on July 16, JRHA reported sales of 98 of the 149 offered, with 51 reported not sold, for gross of 2,867,500,000 yen, down 14% from the same session last year.
Over the entire three days, 327 horses were reported sold from 465 offered for a clearance rate of 70.3%. Gross for the entire sale reached 9,686,600,000 yen ($90,528,970), down 16.3% from last year’s 11,576,900,000.
Reversing the usual Japanese preference for foals over yearlings, a yearling son of Agnes Tachyon topped the sale, fetching 245 million yen ($2,289,719) from Kondo, an amount that in dollars set a record for a yearling sold at auction in Japan.

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