Crunching the Numbers in Decision-Making

 

We will not bore you by repeating the two most oft-repeated analyses about the Keeneland September yearling sale. That would be: The two-day select sessions were down in gross and average because the two main players – Coolmore and Maktoums – did not engage enough in spirited bidding wars to keep the upper end of the market on par with 2006; and, the rest of the sale is strong, buoyed by stiff competition from domestic and other foreign buyers in the middle markets.

Since we’re not dwelling on the obvious, let’s take a closer look at where the market strength is during this sale that continued to hold its own through the 10th session Sept. 20.

A table compiled by BHNow shows which price categories are most in demand this year and which have sustained the greatest declines.

One of the biggest price swings between 2006 and this year came in the $325,000-$349,000 price range, with 25 sold this year compared with nine last year. That is a 177.8% gain.

Almost as impressive was the larger category (grouping together four small sub-categories of pricing) of $600,000-$699,999, which went from 13 last year to 23 this year.

Although the percentages of gains were not as severe, at other levels the increase in numbers of horses sold this year over last year were high. For example, there was a 42.7% rise (from 75 to 107) in the number of horses sold between $325,000-$349,999, and a 44% increase in the $450,000-$474,999 range (from nine to 13).

Also noteworthy in a shift in buying pattern was the level just above six figures, with 491 horses sold this year between $100,000 and $174,999, compared with 436 in 2006.

So where are the numbers declining? Mostly at the lower end of the pricing table, from $5,000 to $24,999.

Weakness at what has traditionally been considered the top of the market – 14 horses in 2006 sold for more than $2 million compared with six this year – bodes well for the level just below that figure.

In the $1.5- to $1.99-million category, there were 10 horses reported sold this year, compared with two a year ago.

Keeneland sales director Geoffrey Russell reiterated what he has said since the select sessions ended: There may have been a psychological block on the part of some buyers from participating those days due to the historical buying strength of the Maktoums and Coolmore.

“With the lack of fireworks between the two major buying groups, it will open spots for others at the top,” Russell said. “There are a lot of people who will give $1 million for a horse but not $5 million.”

Clarity of the yearling price ranges most in demand at the world’s largest sale should help breeders in their decisions on how much to pay for stud fees and how much total investment to make in production costs of a yearling.

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