Keeneland Sale Delivers Growth and Stability

Buyers and sellers watched with relief as the 14-day Keeneland September yearling sale slid into auction history Sept. 26.

“I’m pleased—not elated, but pleased,” said Kerry Cauthen, managing partner of Four Star Sales. “Our clearance rate was better than expected; where we had difficulty was where everyone had difficulty, it was just the market. I mean, you have to be happy with it overall, considering everyone was going into it with grim prospects.”

A total of 3,059 horses sold for $198,257,900. The cumulative average was $64,811, up 6.7% from last year’s average of $60,734. The overall median was $25,000, a 13.6% increase from $22,000 in 2009. The buy-back rate fell to 26.7% from 27.5% a year ago.

“One of the goals we set for ourselves with the new format was to increase trade,” said Geoffrey Russell, Keeneland’s director of sales. “We saw that and there was a very wide ranging group of buyers. We do know we had 39 individual countries represented. Last year we had 30.”

The increased number of foreign buyers has been the result of a buyer development program started in November 2002. The emerging markets program is run by Keeneland sales marketing associate Chauncey Morris, who was has been building relationships with breeding and racing programs in Asia, Europe, South America and Africa.

“We’ve always seen this as a long-term program that is promoting not only Keeneland but Central Kentucky,” Russell said. “It started as an emerging market program but really it is just an international program.”

The biggest changes in the format of the sale included holding Book One in two select evening sessions that offered about 100 horses per night. Then in an effort to spread the quality consistently throughout the first week, Keeneland reformatted its Book 2 into one comprehensive catalog, presenting yearlings alphabetically by dam rather than ranked by pedigree and conformation.

The new formats did generate buzz and excitement. A colt by A.P. Indy out of multiple grade I winner Balance brought a sale-topping $4.2 million on opening night, the highest price paid for a yearling at the September Sale since 2006. Miami-based healthcare mogul Benjamin Leon Jr. bought the sale-topper in the name of his Besilu Stabes. Leon is a noted Paso Fino horse breeder with a farm in the Ocala, Fla., area but a relative newcomer to the Thoroughbred industry. The colt was consigned by Mill Ridge Sales, agent.

In all, three yearlings sold for $1 million or more.

Even in the waning days of the sale, landing horses of quality for a bargain price was not easy.

“If the horse is well-conformed and vets clean, then everyone is on it,” said Chris Owens of Leading Edge Bloodstock of Lexington on the final day of the sale. “Even today they are going for good prices.”

The last couple days of the sale were apparently impacted by the Alltech FEI World Equestrian Games, a two-week world championship event for eight equestrian disciplines that began at the Kentucky Horse Park Sept. 25. Most horsemen shopping at the tail end of the yearling sale are very cost-conscious and hotel rooms became prohibitively expensive for many because of the WEG.

“It was unfortunate it overlapped with the Games,” said Richard Kent of Kaizen Sales. “You noticed a drop-off after Friday (Sept. 24).” Still, Kent said he was reasonably encouraged by the sale’s performance. “I think the drop in stud fees and the lower foal crops to come will bode well in returning the balance of supply and demand. I think we can see the light at the end of the tunnel and this time it’s not the train.”

Because the yearlings sold at this sale were bred when stud fees were near their peak, horsemen understand that an increase in sales is not the same as an increase in profits. Even so, many expect the growth seen during the yearling market should be a good omen for the Keeneland November Breeding Stock sale, which immediately follows the Breeders’ Cup World Thoroughbred Championships at Churchill Downs Nov. 5-6.

“The new format gave stability to the market,” said Russell. “I think we’ll see a huge international presence in November. The Breeders’ Cup when it is held at Churchill is always a great drawing card, and the economies overseas are getting better.”

Cauthen agreed that an improved September sale means good things for mare and weanling market in November.

“If anything, some sense of stability in this market has to create some stabilitiy in November,” he said. “There is now a feeling of a base.”