What will the yearling selling season of 2009 be like? A story with comments from a variety of auction participants appeared in the June 27 edition of The Blood-Horse and also was published online. Now, two more people, Lincoln Collins and Craig Bandoroff, weigh in on the subject.
Collins, a Kentucky-based bloodstock agent, is the owner and president of Kern Thoroughbreds, and also is a director of Three Chimneys Farm, which is a major yearling consignor. Bandoroff, and his wife, Holly, operate Kentucky-based Denali Stud, another major yearling consignor.
Here’s what Collins had to say:
“I think one of the great problems with a very uncertain market is that people are going to find it very hard to value horses in terms of what they’re going to give for them. Uncertainty, of itself, tends to create a soft market. Having said that, and in spite of the problems the racetracks are experiencing, purses are still pretty good and fields are fairly light, so we do have that to fall back on. But I think it’s inevitable, unless there is some kind of major economic recovery during the summer -- which seems improbable -- that it’s going to be a very rough year for people who sell and probably a year of great value for people who want to buy.
“People who really want to own racehorses will continue to buy yearlings to the extent that they can afford them. But they’re going to be more price sensitive because that’s the world that we live in.
“People who have a desire to buy yearlings should get into the market because they may be able to buy a nicer horse for less money and they may be competing in a marketplace where the prices that they’re paying are down more than the purses they might be able to earn. We all know that purses are going to go down, but probably not as much as yearling prices.”
Here’s what Bandoroff had to say:
“I think we’re in for a couple of tough years. Obviously, the pinhookers had a tough time, and they’re a huge base of support (for the yearling sales). I have to think that we’re going to see fewer of them, and the ones who are there will have less money to spend.
“We saw at the 2-year-old sales that there is still a market for the good horses. The big question is what are we all going do with the ones that aren’t special? We’ve probably got to be prepared to have a Plan B and a Plan C because it’s obviously not going to be easy to get them sold. But with that said, the stock market is doing better and I think there is a real correlation to that and the (health of the) horse business. If it (the stock market) can continue to improve, maybe our timing is going to be better than it was for the 2-year-old sellers. I read the Wall Street Journal, and, overall, there is a much better feeling than there was a few months ago. I know I feel a lot better than I did six months ago. I think everybody was wondering if the world was coming to an end. I don’t think anybody is thinking the world is coming to an end anymore.
“Some of the bigger stud fees that you have invested are a big concern. I said last year that I thought there would be very few horses break a million dollars; it would take a very special horse. This year, I think you might see that ceiling get lowered. It’s going to take a very special horse to bring $500,000 or $600,000, and if you walk in there with a $300,000 stud fee, that doesn’t leave you much room. I think all of us will take the attitude that you’re going to make it where you can make it and where you’re not going to make it, you reassess it and just move on. A lot of times we’ll just be looking to move product. I think, in most cases, people who want to sell horses are going to have to be very realistic.”