Anne M. Eberhardt

Making Money Still Difficult at F-T July Sale

Only 27% of the horses offered at the auction were profitable for their breeders.

Like a jet circling a busy airport while waiting to land, commercial breeders at the Fasig-Tipton July select yearling sale were in a holding pattern. Their combined result was the same in one important category as it was in 2009. For the second year in a row, only 27% of the horses they offered were profitable, based on The Blood-Horse’s calcuations, which take into account the stud fees paid to produce the yearlings in the year they were conceived, expenses of $15,000 per horse, and the sale company’s 5% commission.

The average stud fee for the sires of the sale’s yearlings that sold was $30,712, up less than 1% from last year. The average price brought by the yearlings was $75,780, down 2.5%. The yearling-price-to-stud-fee ratio was 2.34, a decline from 2.41 in 2009.

It was more difficult for pinhookers to make money at this year’s July auction. Their rate of return on investment, which takes into account the sale company’s 5% commission and expenses of $6,000 per horse, was 44.1% compared to 65.7% in 2009. Forty-three percent of the horses they offered were profitabe compared to 51% last year.

Pinhookers reduced their risk for the 2010 July sale, paying an average price of $44,563 for their stock as weanlings and short yearlings. The amount was down 17.3% from the average for pinhooked horses at the 2009 July sale. But when sold as yearlings, this year’s pinhooked horses brought an average of $76,675, which represented a decline of 26.6% from last year’s comparable figure.

The Fasig-Tipton select yearling sale was held July 13-14 in Lexington.