Reflecting on a Tough OBS Yearling Sale

The Ocala Breeders’ Sales Co. August yearling produced some discouraging results, but they weren’t really surprising considering the slumping American economy and the mixed bag of returns at other yearling auctions. On top of all that, the threat of Tropical Storm Fay didn’t help matters any. Following are what some of the OBS sale participants had to say about the state of the market:

Lynne M. Boutte, consignor: “It’s a little challenging; there is no bottom. I have a lot of blue collar horses, and I need the blue collar people, but a not a lot of them are here. I sold a nice little colt this morning for $1,500, I thought sure I was going to get $8,000 to $10,000, but I’ve got no reserves on 90% of the horses I have. It’s tough.”

 

Brent Fernung, Journeyman Bloodstock: “It’s been a tough sale. It looks to me like there is a general turndown in the medium-priced horse market, and I don’t think the weather has helped us any either.

“You see fuel prices going up, and the economy is in a general malaise.  People who buy these kinds of horses are more affected by that than the guys who buy a $500,000 horse.  Fuel prices won’t bother a fellow who will buy a $1-million horse, but they will a guy who buys a $40,000 or $50,000 horse.

“Right now, it looks like there’s a lot of trading amongst ourselves. The really cheap ones, I don’t know where they go; I have no idea. But these $30,000, $40,000, or $50,000 horses, we’re selling them to pinhookers and they’re going to try to find that end user later on down the road. There are a lot of horses that just can’t find a new home right now.”

 

Richard Kent, Kaizen Sales: “At least it’s better than having a root canal, but not much. It is what it is. They (the buyers) very picky on what they want, and if you lead a horse up that they want, there’s a fair price for it. Otherwise, there’s no value for it, nothing.”

 

Barbara Vanlangendonck, Summerfield: Monday morning (Aug. 18) at 5 a.m. we, sat down and we revised all of our reserves and our thinking, decreased our appraisals, and we sold the majority of our horses (in the select session).

“You have to bring an athlete out. You can’t sell a small horse. The fact that Northern Dancer was 14.2 hands, 14.3 hands, or whatever he was, means nothing to anybody. We’re selling primarily to pinhookers and they need a big, strong, correct horse that looks quick because they’re going to have to turn around and go back and resell it.

“We had a much larger buyer base last year. Whether or not they changed their plans or not after hearing about the storm, I don’t know. But Miami trainers probably didn’t come because they’re going to stay home with their horses. Why would you leave a barn full of profitable animals to come up here for more?  If you’re going to come down from Kentucky, why would you fly into this not knowing if you’re going to be able to get out? So, I think that the pinhookers have had it pretty much all their way this week and I wish them good luck. I hope they make money. But it’s certainly been a little more difficult than we thought it was going to be.”

“It’s very hard as an owner to realize, to admit, that your baby is not pretty. We had a few horses of our own in this particular sale and we drastically revised our reserves to get them sold.  We’re walking away with significantly less money than we had hoped to achieve for our own personal horses. But you know what Mr. (Robert) Courtney told me years ago? Take horses (to a sale) and bring home money. Sometimes you have to take less for one that what you’ve got in it, but it’s off your feed bill; it’s off your vet bill; and you wish the buyer good luck.”

 

Jim Perrone, Perrone Sales: “It’s not going great. There’s just nobody here. We just brought a beautiful Unforgettable Max filly up here and we only got $3,000 for her, but the owner wanted her to go. He didn’t want to take her home.

“In all the years Ive been coming to OBS in August, I’ve never seen this few people on a Wednesday (Aug. 20). It has to be this weather; it has to be. I’ve heard people talking about some people who were going to come, but they didn’t come.

“Obviously, the economy has been a factor in each of the sales so far. I’m sure there have been people who have adjusted to buy less, but if you’re going to be in the horse business, you’ve got to have merchandise to sell, so you’ve got to buy it.”

 

Bryan Rice, pinhooker:  “I think when a good horse walks in here, there’s a colony of people shopping that certainly recognizes it, and we’re having to step forward if we want to get one of those better horses bought. I’m wishing that there were more of those horses with real opportunity mixed in here so we could fill our needs a little better, but we’re going to have to be patient and go to Keeneland and work hard there.

“In recent years, we find that the people who present these horses are taking advantage of a strong market in Kentucky, and we’re not seeing the same group of horses here (at OBS) that we used to. I think that’s true as much as I don’t want to admit it. Some of the big operations that used to keep strong broodmare bands in Florida – the Mockingbird Farms and places like that --  would funnel horses in here that were really, really special, and we all had an opportunity to work with them as a result of it. But some of those farms are gone. The  commercial market has forced people to move stallions to Kentucky when they get off to a good start, and with operations like Padua moving their breeding operation out of here, it  leaves us with a little bit of a void in terms of quality horses to sort through at this point.

“I’m sure we (pinhookers) are much more selective than we’ve been in years past. When we buy horses that aren’t quite the right horse and they don’t achieve positive results for us, that just forces us to do a better job of selecting when we’re buying. The people that we’re selling these horses to as 2-year-olds also have become much wiser.

“I think the economy puts plenty of pressure on us.  Our expenses are driven up considerably as far as transportation and feed are concerned and now all of our employees need more money in order to stay at the same standard of living.

“The economy is putting pressure on the business all around. It makes the people we’re selling to more careful and we have to be careful that we place ourselves properly or we’re going to get dismal results. It’s still a great game, but it just requires us to be very good at it, not just kind of good.”

 

Dan Hall, Hidden Brook: “I think it’s just more of the same. The nice stuff will bring plenty, but the way the market and the economy are right now, the middle market and lower market are tough. I think we’re going to see more of the same in September (at Keeneland).”

 

Jaqui de Meric: People are doing to the yearling consignors what they have been doing to the 2-year-old consignors for years. Everybody is focusing on what is perceived to be the cream and leaving the other horses alone. Instead of decreasing what they would pay, they just aren’t interested. It costs as much to train a cheap horse as it does an expensive one.”

 


 

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