Strength in a Regional Market

The Fasig-Tipton Texas summer yearling sale that concluded Tuesday with 14.8% and 12.7% increases in average and median prices, respectively, benefited from demand for Louisiana-breds.

Breeding programs in regional markets such as the Mid-Atlantic, Midwest, South, and Southwest are often directly intertwined with the success, or lack thereof, of the racing programs in those areas of the country.

If racing flourishes, demand for racehorses fuels the breeding industry. A downturn in racing’s fortunes within a particular region results in shrinkage for breeders and farms.

Similarly, the regional health of both racing and breeding programs impact the public auctions held in those locales. Regional sales companies find themselves the beneficiaries of growth and share the pain when there is a downturn.

A case in point is the Fasig-Tipton Texas summer yearling sale that concluded Tuesday with 14.8% and 12.7% increases in average and median prices, respectively.

Much of the sale’s momentum was driven by strong demand for horses bred in neighboring Louisiana, where racing has been boosted by large increases in purses paid to owners. The purse increases are due to revenues from slot machines operated by Louisiana’s racetracks.

Louisiana-breds accounted for 36.9% of the 241 horses sold during the Aug. 27-28 sale at Lone Star Park in Grand Prairie, Texas, and the three top-priced horses were bred in the Cajun state. The average price of $18,780 paid for the Louisiana-breds was 37.8% higher than the sale average of $13,623. Texas-breds, on the other hand, comprised 41.5% of all horses sold but their $8,620 average was less than half the figure for Louisiana-breds and well below the sale as a whole. (Not surprisingly, the top sale average of $23,825 came from the 20 Kentucky-breds sold at the sale).

Tim Boyce, local sales director for Fasig-Tipton Texas, said the auction has a niche within the Southwest market and is sustained by horses bred in Louisiana, Texas, and, to a lesser extent, Oklahoma. Oklahoma is the latest state to see racing purses lifted by racetrack slots and it is only a matter of time before the breeding industry in that state sees the benefits, Boyce said.

“The breeding programs in the Southwest are turning out nice horses and they are winning more money,” he said, noting the slots-driven boosts in money paid out to Louisiana- and Oklahoma-breds racing in those states. “The return on the investment is good down here. There is not a lot of commercial breeding in Oklahoma right now, but I think you will see that change with the slots.”

Overall, Boyce said there was strong demand for a lot of the horses in the mid-price range, primarily due to so many pinhookers being in attendance.

“We had a strong middle market, but the down side is that the bottom of the market declined,” Boyce said.

Horses sold in the $0-$4,999 and $5,000-$9,999 price ranges fell 22.6% and 3.7%, respectively, but rose 6.1% at the $10,000-$19,999 range.

“I think the sale proved it is a good regional market and that it is a good place for pinhookers and end-users to buy,” he said. –By Ron Mitchell