Anne M. Eberhardt

Rebound Unlikely During Keeneland Auction

But losses could be less steep than a year ago at November breeding stock sale.

The Keeneland November breeding stock sale was hammered last year by the global financial crisis, suffering alarming downturns of 45.5% in gross, 39% in average price, and 42.9% in median price after a record-setting run in 2007. This year, consignors and sale company officials are hoping that – at the very least – the declines will slow down, but the odds are against a rebound during the auction’s 13-day run, Nov. 10-22, in Lexington.

The breeding end of the Thoroughbred business has been hit especially hard, and with many horsemen planning to send fewer mares to the breeding sheds in 2010 in an effort to cut their costs, there probably will be less demand for many of the horses at Keeneland, especially the lower-quality producers.

“We go into every sale with a degree of optimism, and we’re hoping that things will turn around a little bit,” said Bill Farish of Lane’s End Farm. “But we think the chance (for improvement) is not great, so we’ll just have to see what happens. We’re seeing the projected foal crop go down to 30,000. I don’t think we’ve seen the end of that trend, and I don’t know where it will bottom out. There will be a fair number of mares that are in the sale that may not be bred back next year.”

There are 4,702 horses cataloged for the auction, down 17.6% from the record figure of 5,709 in 2008.

“I think what you’re going to see -- from what I’ve been hearing out there – is that there’s more interest in having mares in foal to proven stallions,” Farish said, “and I think we’re going to see those horses maybe do better than they have in the past, which, I think, is a healthy thing. I’ve never quite understood why there was such a clamor for first-year stallions.”

Two of North America’s most successful breeding operations – the W.T. Young family’s Overbrook Farm and Windfields Farm, which was founded by E.P. Taylor – have dispersals in the November auction.

“As the sale opens, there are positive signs emerging on both macro and industry levels,” said Geoffrey Russell, Keeneland director of sales. “There are certain segments of the global market where recovery is under way in earnest. As such, we anticipate greater international participation based on the strength of certain currencies against the American dollar and keen interest in recent overseas sales.

"There is improvement with regard to oversupply, which will likely be overcome before the macro issues are resolved. The 2009 Report of Mares Bred (issued by The Jockey Club) is down, which leads to less horses cataloged for November.”

Weanlings could do better than expected because pinhookers improved their profits earlier this year at the yearling auctions when they reoffered less stock that had been purchased for lower prices in 2008. There also are end users interested in purchasing weanlings, according to Kentucky bloodstock agent Julie Cauthen, who has several clients who are eager to buy foals to raise and eventually race.

“The good babies are going to sell well, but the mares are going to be a very soft part of the market other than, of course, the superstars,” said Tommy Eastham of Legacy Bloodstock. “I’m afraid that a lot of mares are in the sale are 12 years old and older and haven’t had any success. I think you might see some mares bring half of the stud fee in them. I hate to say that, but that’s the reality.”