The yearling market in North America showed signs of stabilization last year after a scary period of dramatic declines. The average price at public auction fell less than 1% to $39,982 while the median price was the same as it was in 2009, remaining at $10,000.
In 2011, there are several reasons why the outlook for buyers and sellers of yearlings should be more positive even though America’s economy continues to struggle.
Because of a high profile tax bill signed into law by President Obama last year, buyers will be able to take advantage of a 100% bonus depreciation on the yearlings they purchase this year as long as they place those horses in service before the end of 2011.
Shoppers who race horses in New York will have an added incentive to buy yearlings because of the video lottery casino being built at Aqueduct. Delayed for many years, the casino is expected to open in the near future and if it generates the revenue expected, purses at New York Racing Association tracks will increase significantly during those young horses' competitive careers.
Consignors, meanwhile, should benefit from the lower stud fees they paid to produce their horses. In 2009, when the yearlings of 2011 were conceived, the average fee for a stallion was $12,066, which represented a decline of 12% from 2008’s average of $13,714. Those numbers were compiled by The Blood-Horse MarketWatch financial newsletter and were based on the fees for stallions that stood for $2,500 or more.
A drop on foal crop size also should help consignors, bringing the supply more back in line with demand and possibly increasing yearling prices. According to The Jockey Club, the foal crop of 2009 (yearlings of 2011) has a projected size of 34,000, which is down from 35,116 in 2008.
Fewer yearlings will be offered at the Fasig-Tipton Kentucky’s select yearling sale July 12 in Lexington and at the Fasig-Tipton Saratoga select yearling sale Aug. 8 and 9 in New York. Officials of Keeneland and the Ocala Breeders’ Sales Co. said their yearling auctions also will be smaller this year.