The results of the Keeneland November breeding stock sale in Lexington provided an opportunity for the first glimpse of the impact of lower stud fees. The reductions in 2009 and 2010 were welcomed by commercial breeders, but based on The Blood-Horse’s analysis of the auction’s statistics, they didn’t change breeders’ financial fortunes dramatically at Keeneland.
One reason why was the market for weanlings and mares continued to decline based on their average prices. Even though the yearling sales earlier this year showed signs of stability, November shoppers remained cautious, and they won’t show a real enthusiasm, especially for mares, until yearling prices improve significantly, according to Brent Fernung of Journeyman Stud.
“When you see that yearling market bounce back real strong and have a 15% increase and see smiles on some of these people’s faces, they’ll be back in the broodmare market,” he said.
In other words, this is the bottom line: Lower stud fees are only part of the solution to curing the ailing Thoroughbred auction business.
The average stud fee paid to produce the weanlings that were sold at the Keeneland Novmber auction was $27,157, which was down 18.3% from last year. Those weanlings brought an average price of $41,337, which was down 8.3%. Fifteen percent of the weanlings offered were profitable compared to 14% in 2009. The ratio of average price to average stud fee was 1.45, up from 1.30 last year.
The average stud fee paid to get mares that were sold at the November sale pregnant was $22,724, down 11.4% from 2009. Those mares brought an average price of $57,814, which represented a 7.6% decline. Forty-four percent of the mares offered sold for prices exceeding the stud fees paid to get them in foal compared to 47% in 2009. The ratio of average price to average stud fee was 2.43, up from 2.33 last year.
The Blood-Horse divided the mares that were offered and sold at Keeneland into six categories based on the stud fees paid to get them in foal. The ones covered by the most expensive stallions (stud fees of $100,000 and up) had the highest price to stud fee ratio of 3.83 and 66% brought prices that exceeded the stud fees of the stallions to whom they were bred. Seventy-five percent of the mares bred to stallions with stud fees ranging from $75,000-$99,999 brought prices that exceeded those fees, which was the best performance for any category, and their price to stud fee ratio was 3.08.
Mares bred to stallions that stood for $10,000-$24,999 had the lowest price to stud fee ratio (1.74). Only 39% of the those mares brought prices that exceeded the stud fees of the stallions to whom they were bred and that figure also was the lowest for any category.
Among the Keeneland weanlings, which were divided into six categories based on the stud fees paid to produce them, those whose stallions had fees ranging from $50,000 to $74,999 achieved the biggest financial successes for their breeders. Thirty-two percent were profitable, based on The Blood-Horse’s calculations, and their price to stud fee ratio was 1.99.
Weanlings by stallions that stood for $100,000 and up had the lowest price to stud fee ratio (0.92). Only 5% of the weanlings whose sires had stud fees of under $10,000 were profitable, and that was the lowest percentage for any of the stud fee categories.