Foreign shoppers skimming the cream off the top at American Thoroughbred auctions isn’t a new development. At various times over the years, buyers from Japan, the Middle East, and Europe have been prominent in the Thoroughbred marketplace and picked off the best it has to offer.
A recent example of the trend involves the important breeding stock sales in Kentucky. In 2008, when an American recession turned into a global financial crisis in the latter part of the year, domestic shoppers were the dominant force at the upper end of the market.
Forty-two horses—nearly all of them broodmares, broodmare prospects, or female racing prospects—were sold that year for $1 million or more apiece at the Keeneland January horses of all ages, Fasig-Tipton Kentucky November select mixed, and Keeneland November breeding stock sales. Domestic buyers purchased 28 (66.7%) of the seven-figure horses. Foreign shoppers bought 14 (33.3%).
In 2009 the buying power was divided more evenly. Domestic and foreign shoppers each purchased six of the 12 seven-figure horses that were sold. But in 2010 foreign buyers gained the advantage, acquiring 10 (55.6%) of the 18 horses that brought $1 million or more apiece. Representatives of Ireland-based Coolmore Stud were active, and so were horsemen from Japan and Australia.
During this year’s Keeneland January auction, one horse was sold for a seven-figure amount. Teruya Yoshida’s Shadai Farm of Japan purchased grade I winner Ave (by Danehill Dancer), a racing or broodmare prospect, for $1.4 million.
Some countries have recovered faster from their economic woes than the United States and many foreign currencies have grown stronger against the American dollar, increasing the impact of foreign shoppers, especially those from Japan and Australia, according to Geoffrey Russell, Keeneland’s director of sales.
Whenever buyers outside of the U.S. gain an upper hand, domestic horsemen worry about the loss of major and valuable bloodlines. One of the most vocal recently has been John Sikura of Hill ‘n’ Dale Farms in Kentucky.
“In the short term, it provides great market stability at the highest level because there is competition and market support for those mares,” he said. “But the long-term concern, which is evident and obvious, is that if the best mares are all bought by foreign interests, the quality of our gene pool and the importance and significance of Thoroughbred breeding in our country will be affected.
“The question is this: How long will market conditions exist where foreign buyers can take advantage of this opportunity, which is a soft North American commercial mare market? If you have a year or two when these fillies and mares leave, the impact is really nonexistent. But if it happens for a decade, then it’s common sense to see that our pedigrees will be watered down. It’s incumbent on us to find solutions to our domestic problems so that we can again be competitive and buy or retain our best mares.”
What needs to happen, in Sikura’s opinion, involves more than an improvement in the American economy and an increase in American auction prices for Thoroughbreds. The Sport of Kings also needs to become healthier.
“Factors such as economies worldwide or the value of our dollar, those things are always in flux,” he said. “Some years are better than others, and we have no influence, impact, or control over any of those things. But there are problems in our own industry that need solving. We have to revitalize our racetrack handle, increase the relevancy of racing in today’s sports market, and work very hard in changing the perception people have of our industry. I don’t believe any of the solutions lie in the timing of a sale or the number of days in a sale. Those are superficial.”
Mark Taylor of Taylor Made Sales Agency agreed with Sikura that the potential for loss of American pedigree strength could be a threat, “but in the short term, I’m a capitalist,” he said. “The market is what it is and I’m glad the foreign people are here buying our horses because, otherwise, we would be in worse shape. Thank God for everybody who comes in and raises their hands. I don’t care where they’re from.”
Russell downplayed the impact of enthusiastic foreign spending on America’s Thoroughbred gene pool, calling pedigree strength a renewable resource.
“We run a Kentucky Derby (gr. I) every year, so we’re always going to have the dam of the Kentucky Derby winner,” he said. “We run a Kentucky Oaks (gr. I) every year so you’re always going to have the Oaks winner and the dam of the Oaks winner. We’ll just keep producing top pedigrees. Are they going to be different? Yes. But we will produce more quality mares, and as the economy gets better, they’ll stay here.”
The Next Generation
Canada lost one of its top horsemen when Bob Anderson died in November following a heart attack. But his nursery, Anderson Farms, will continue to operate with his son, David, and daughter, Jessica Buckley, who lives in New Jersey, carrying on their father’s legacy. The Anderson family patriarch bred and/or raced such horses as Prince Avatar, a Canadian champion in 1983; Pennyhill Park, Canada’s champion older female in 1994; and 1993 Carter Handicap (gr. I) winner Alydeed, who also captured the 1992 Queen’s Plate and finished second in the 1992 Preakness Stakes (gr. I).
David Anderson, 41, attended this year’s Keeneland January sale, and with the help of Kentucky-based bloodstock agent Marette Farrell he shopped for broodmares and broodmare prospects, spending $750,000 for three head.
“It’s a very emotional time for me to be here,” Anderson said. “Every time I’ve been to Keeneland before now has been with my father. I grew up here and around the racetrack, and I’ve been involved with horses my entire life.”
Pointing to a spot in the Keeneland sale pavilion, he added, “As a matter of fact, I stood right there when the $13.1 million yearling (Seattle Dancer) was sold (in 1985).”
The Anderson Farm purchases at the January auction included the $400,000 Song and Danz, who is the dam of 2009 Hollywood Juvenile Championship Stakes (gr. III) winner Necessary Evil. At the time of her purchase, Song and Danz was in foal to Tapit.
“Song and Danz was really Marette’s pick of the sale,” Anderson said. “She texted me and said, ‘This is the one that I love.’ I got down here and I shared the same sentiments with Marette, so she (Song and Danz) was the one we really wanted to go after. I think Unbridled’s Song is going to be a tremendous broodmare sire, and she’s in foal to the right horse. Necessary Evil was a very fast filly, and she (Song and Danz) has got a couple of Any Given Saturday offspring going for her; they, by all accounts, look very good and are doing quite well. Her Bandini also is a pretty good horse, so there is a lot of upside with her.”
The other Anderson Farms acquisitions were the $180,000 broodmare prospect Loving Vindication (by Vindication) and the $170,000 unraced Lady Charade (by Pulpit), who was in foal to Indian Charlie at the time of her purchase and is a half sister to grade I winners Auntie Mame and Star de Lady Ann.
“We want to try and operate a small, boutique commercial breeding program and maybe race a couple of our fillies,” Anderson said. “We’ll breed to sell into the Kentucky market and hope that some of the yearling buyers are going to want to come to Canada and race their purchases from us and go after some of the Canadian-bred money.”
Anderson Farms’ broodmare band had “17 or 18” members before the Keeneland shopping trip, according to Anderson, and the operation also has a Standardbred division with eight or nine broodmares, he reported. Anderson ran the Standardbred division prior to his father’s death and plans to carry on that venture along with the Thoroughbred operation.
Even though racing and breeding programs in the province of Ontario, where Anderson Farms is located, have benefited from slots, “the breeding base in Canada has really eroded and the big farms of the past like Windfields and Kinghaven have gone away,” Anderson said. “Even my father’s farm has gotten smaller. At one point, I think, there were 140 broodmares.
“We’re starting to get some better stallions in Canada,” Anderson continued. “Frank Stronach has brought in some nice horses and so have some other people. There are some small, smart breeders who are going to do very well.”
Anderson doesn’t seem to be daunted by the responsibility of Anderson Farms’ future even though recent economic upheavals globally and problems in North American Thoroughbred racing in general, including falling auction prices and declining handle and purses, have created tough times for breeders and sellers.
“The whole world has changed,” he said. “We’ve all had to kind of re-look at our lives and our lifestyles and see what’s important and what’s not. A lot of people are stepping out of the game, and there are some good horses coming on the market at discounted prices. Hopefully, we can take advantage of the situation. We’re going to try.”
Naohiro Hosoda
Keeneland/Coady Photography