Cumulative increases of 19.3% and 7.3% in gross sales and average price, respectively, made the mood within the Keeneland sale pavilion almost euphoric on Nov. 6, the second session of the marathon November breeding stock sale. Many consignors relished the continuing bull market for broodmares and well-bred weanlings, while realizing there are many more days to go for the sale that continues through Nov. 19. They know the circumstances could change.
For now, however, there is only upside.
“Unbelievable,” said Paramount Sales’ Pat Costello, repeating an adjective used frequently by both buyers and sellers. “We got almost everything sold, and the ones that didn’t sell we were able to sell later.”
Coming on the heels of Monday’s record session in which a world-record price of $10.5 million was paid by John Ferguson for the mare Playful Act, the market Tuesday showed continued strength with the mare Island Sand bringing a session-topping $4.2 million.
In addition to the lofty increases in gross sales and average price, the sale’s buy-back rate has been low. The percentage of horses bought back (meaning they did not meet a pre-set reserve price) during the first two sessions has been under 20% each day, an almost unprecedented figure for this type of sale.
“It shows that people are being realistic about the value of their horses, and, as a result, their horses are selling,” said Keeneland sales director Geoffrey Russell.
Consignors are pleased but buyers are frustrated, having spent days to identify and do the vet work on the horses they wanted, only to be continually shut out by the strong demand. Because so many buyers eventually become sellers at later auctions, however, many were encouraged by the robust market. The pain they feel having to pay more for the horses they want now will fade quickly if the bull market continues.
Considering what is pushing up the market, it indeed could be short-lived. The strong top and middle markets are being helped by a U.S. dollar that is growing weaker against other foreign currencies, particularly the British pound (one pound equals $2.08) and the euro (one euro equals $1.45). While a breakdown is not available for domestic and foreign buyers, Keeneland officials have made it known that there is a significant influence by foreign buyers on the November market.
To the extent that non-domestic money is driving the market, that could as easily go the other way if there are major fluctuations within world economies.
Also, veteran horsemen know that the horse industry’s fortunes run in cycles, and that for every upward spiral there will be a downturn.
As one consignor said, “When this thing flattens out, it’s really going to flatten out.”