Anne M. Eberhardt

Can Market Rebound at Saratoga?

The yearling selling season got off to a sluggish start in Lexington. The number of horses sold, gross revenue, average price, and median price all dropped at the Fasig-Tipton Kentucky July select auction while the buy-back rate rose to 38.8% from 32.1% in 2006.

The main causes of the setbacks, according to most people, were America’s economic woes, which include high gas prices, falling house values, job layoffs, and business shutdowns. All those problems will still be around when Fasig-Tipton conducts its Saratoga select yearling sale Aug. 4 and 5 in New York.

Does that mean the Saratoga sale also will stumble? Not necessarily.

The Saratoga auction has a better opportunity than the Kentucky sale to stay even with last year or rise a little for a couple of reasons. One, the supply of horses is much smaller, 195 cataloged compared to more than 500 in Kentucky. Second, the pedigrees of the yearlings, in general, are fancier at Saratoga, so they usually cost more. Last year, the auction’s average price was $289,310.  People able to afford horses at that level are less likely to be affected by an economic downturn than buyers shopping at Fasig-Tipton Kentucky and paying an average price of $92,298 (this year) for a yearlings.

Fasig-Tipton officials are known for they stress they place on conformation in their selection process for the summer yearling sales, and if there is a large group of truly exceptional individuals at Saratoga, then prices should be solid.

However, hardly anyone will be surprised if the Saratoga sale fails to keep pace with last year’s performance. Markets have psychological components, and when bombarded by bad news, some shoppers, even when they’re in great financial shape, just don’t feel as good about spending money and hold back. They also are less prone to take a risk, which means horses with minor physical problems or bloodlines that haven’t produced major winners in recent generations might have a harder time than usual finding new homes. And if the buy-back rate is way up, it will be difficult to celebrate even if the other key business figures are close to last year’s  results.