The life of a commercial breeder used to be pretty simple: Buy some mares, send them to some stallions to be covered, raise the resulting foals, and sell those young horses as yearlings.
That strategy worked for a long time. Then foal crops grew and the supply of sale horses outstripped demand. Buyers got pickier about conformation. The health of racing declined and economic problems developed outside the Thoroughbred industry.
For Mike Akers, the response to all the negative developments has been to become more flexible. As the chairman of Dapple Stud and Dapple Bloodstock in Kentucky, he owns mares and manages mares owned by others.
“I think you are going to see some breeders look at the business this way: I raise a crop and I can sell some as weanlings, some as yearlings, and some as 2-year-olds,” he said.
In other words, sell a horse when the time is right to maximize its value.
“To me, it’s a more viable alternative than being pigeon-holed into being a yearling seller,” Akers said. “You watch them grow and make your choices as you go along.
“Some horses are as good as they are ever going to be physically as weanlings,” he continued. “Some still aren’t mature as yearlings. With horses that have a lot of pedigree, you can sell them at a walk. But you may have one out of a mare whose family isn’t doing a lot. If that horse (her offspring) can breeze well, you’ll get a better multiple of your stud fee when he’s a 2-year-old than when he’s a yearling. There are a lot of reasons to manage your sale horses differently.”
Akers said he “stumbled into” the idea of getting out of the selling-young-horses-as-yearlings rut because of Garifine, a son of Belong to Me.
Akers was a member of the partnership that bred Garifine. In 2005 Viking Stud consigned the bay colt to the Keeneland September yearling sale for the partnership. He was Hip No. 3500 in the auction’s catalog and ended up being bought back for $105,000.
“We didn’t think he got to be in front of the right buyers,” said Akers of the decision to keep Garifine.
The following year at the Ocala Breeders’ Sales Co. March select sale of 2-year-olds in training, Garifine brought $1.8 million after working a quarter mile in :21. The time was the fastest for that distance at the auction.
New Jersey bloodstock agent Buzz Chace purchased Garifine for New Jersey developer Al Gold from Wavertree Stables, agent. The price was a record for any horse, of any age, ever sold at an OBS auction.
“If you can manage your horses by selling them when they are at their best, you’ll probably be rewarded in the long run,” Akers said. “But the key is to have enough cash flow because it is expensive if you have to carry them until they’re 2-year-olds.”
Brereton Jones of Kentucky-based Airdrie Stud still concentrates on selling yearlings but has made racing a bigger part of his operation.
“When the market started getting tougher, there were more horses that we couldn’t get sold; some didn’t even get a bid and they were nice horses,” he said. “I needed to either race them or stop breeding them. I decided to race them because I thought we were raising a good product, and it’s paid off so far.”
In the case of Biofuel, Jones didn’t even try to offer her in a yearling sale because she was back at the knees and her sire was cold commercially. But those factors, which would have caused many buyers to pass her by, didn’t keep her from thriving at the track. Carrying Jones’ colors, the daughter of Stormin Fever was Canada’s Horse of the Year in 2010.
Biofuel’s half sister, Tu Endie Wei (by Johar), also was back at the knees as a yearling. Scratched from the 2010 Keeneland September yearling sale and now racing for Jones, she has won two added-money events in Canada in only two career races.
“I think she’s a Breeders’ Cup filly,” Jones said.
No Such Word lacked commercial appeal as a yearling because her mare, then 18 years of age, hadn’t produced any stakes-winning or stakes-placed runners, and her sire, Canadian Frontier, had gotten off to a slow start at stud. She ended up in Jones’ racing stable and last year, she captured the Gazelle Stakes (gr. I), Monmouth Oaks (gr. III), and Honeybee Stakes (gr. III) along with two other added-money events.
Yet another success story involved Summer Soiree, who was bred by Jones and his son, Bret. They put together a partnership to race the daughter of War Front after buying her back for $70,000 at the 2008 Keeneland November breeding stock sale and $72,000 at the 2009 Fasig-Tipton Kentucky July select yearling auction.
Summer Soiree won the Bourbonette Oaks (gr. III) this past March for the partnership before being sold privately to Team Valor International. Since then, the filly has carried Team Valor’s colors to victory in the Boiling Springs Stakes (gr. IIIT) and Del Mar Oaks (gr. IT).
Had racing not become a bigger part of Jones’ business plan, “I would probably be thinking about trying to sell some of our breeding stock or sell part of the farm right about now,” he said. “Instead, I’m having fun.”
Jones also bred and raced Proud Spell (by Proud Citizen). Never offered at public auction because she was small and down in the pasterns as a yearling, Proud Spell was 2008’s champion 3-year-old filly.
It’s Snow Good
This past winter was an especially snowy one in Central Kentucky. While some people were complaining about the weather, Gerry Dilger of Dromoland Farm used it to his advantage.
Dilger has enjoyed the biggest pinhooking score so far during the 2011 yearling selling season and the snow contributed to his accomplishment. In the name of Summit High Equine, Dilger purchased a Bernardini—Mountain Mambo colt for $170,000 from Four Star Sales, agent, at this year’s Keeneland January horses of all ages sale. Dromoland Farm, as agent, resold the dark bay or brown yearling for $750,000 to Sheikh Mohammed’s bloodstock manager, John Ferguson, during the recent Fasig-Tipton Saratoga select yearling auction.
Four Star Sales also had consigned the colt, as a weanling, to the 2010 Keeneland November breeding stock sale but had bought him back for $120,000.
“I thought he had grown a lot from November,” said Dilger of his first impression of the colt at the January auction. “But the ground was frozen hard, and babies just don’t walk as well on the hard ground and he didn’t really flow.”
Dilger had an opportunity to look at the colt again after some snow had fallen and provided the frozen surface with a soft covering.
“I went back to see him and he showed himself beautifully,” the pinhooker remembered. “He gave me a good walk and did everything perfect. I said, ‘Hey, I want him.’ ”
The colt is the third foal out of his stakes-winning dam.
New York-bred Appeal
Charlotte Weber is a regular participant in the Fasig-Tipton Saratoga select sale. This year, in the name of Live Oak Plantation, she bought four yearlings for $965,000.
Weber also shopped at Fasig-Tipton’s New York-bred preferred yearling auction, picking up an additional four horses for $295,000 to rank third on the list of biggest spenders. The yearlings purchased were a Songandaprayer filly and colts by Belong to Me, Langfuhr, and Utopia. The son of Langfuhr, at $125,000, was the most expensive.
The scheduled opening of a video-lottery-terminal casino later this year at Aqueduct is what attracted Weber to the New York-bred preferred sale, according to Bruce Hill, who is the general manager for her Live Oak Stud in Florida.
“It was all tied directly to the slots and the additional racing revenue that is expected,” he said. “It (alternative gaming) has served several other states well. It starts out with a bang and then slows down. But the additional purses still are significant, and we wanted to be in on the ground floor of that.”
Hill had attended the New York preferred sale in 2001 when Funny Cide was sold for $22,000. The gelded son of Distorted Humor went on to become the champion 3-year-old male of 2003 after winning the Kentucky Derby (gr. I) and Preakness Stakes (gr. I). But even though the auction produced a racing superstar, Hill came away unimpressed with the stock he saw.
“I thought it was pretty average,” he said.
Ten years later Hill was surprised by how much the caliber of the auction’s offerings had improved.
“To be honest with you, the quality was better than I was anticipating,” he said. “We were very strict with our parameters and our budget, and we stuck to them pretty darn close. But we did have to make an adjustment to our appraisals because the sale was so strong. We came away with four yearlings we were pleased with, and we got outrun on several others.”
Hill and some other members of Live Oak’s buying team returned to Florida before the preferred sale started, leaving Weber to handle the bidding with the aid of a short list of horses that they had prepared.
“We did the legwork, and she took care of the rest of the chores on her own,” Hill said.
Live Oak isn’t scheduled to make any adjustments in its breeding program because of the growth of alternative gaming in New York.
“We’re probably going to stick to taking care of our own business at home in Florida and won’t be trying to establish a farm or even foaling mares in New York,” Hill said. “Rather than change the direction and focus of the entire program, it’s a lot easier for us to go and buy some New York-breds and keep it simple. We actually ended up with five New York-breds because one of the yearlings from the select sale—a Kitten’s Joy—Caterette colt—was bred in New York. That gives us all the New York-breds we need right now.”
But Live Oak could return to the preferred sale to shop for New York-breds in the future.
“If the VLTs do generate more than $30 million in additional purses (in the first year of the casino’s operation) and we have some luck with the horses we bought, we’ll probably be back if the sale continues to have the same quality,” Hill said.