Published in the June 8 issue of The Blood-Horse
Non-select sales of 2-year-olds in training experienced declines in gross revenue, average price, and median price in 2002. Usually such negative trends are signs of poor economic health. But the losses tended to be minor, and were offset, in part, by a significant decrease in the buy-back rate. In the final analysis, the market for modest juvenile stock this year was fairly stable. Summarized in the table accompanying this article are figures from the Ocala Breeders' Sales Company's April 22-25 auction in Florida; Barretts' May 13 and 14 sale in California; and Fasig-Tipton Midlantic's May 20-21 auction in Maryland. Also included are statistics from the 1999, 2000, and 2001 editions of those sales. Comparisons of the combined results for the three auctions in 2001 and 2002 produced the following trends: --The number offered fell 1.8%, from 1,644 last year to 1,615 this year. --The number sold rose 5.7%, from 1,116 to 1,180. --The gross revenue decreased less than 1% from $31,025,400 to $30,921,300. --The average price dropped 5.7%, from $27,801 to $26,204. --The median price declined 9.9%, from $17,750 to $16,000. The highest individual price for a horse decreased from $550,000 last year to $330,000. But the top of the market had a broader base. The number of horses sold for individual prices of $100,000 or more increased from 38 to 40, the most since The Blood-Horse began tracking combined figures for the three sales in 1996. The number sold for $50,000 or more surged from 149 to 167, another high for the seven-year period. One of the most encouraging statistics for the three auctions was the buy-back rate, which fell from 32.1% to 26.9%. The 2001 rate was the highest ever while the 2002 figure was the lowest recorded since 1997, when 24.5% of the horses offered failed to find new homes. In contrast, the combined buy-back rate for 2002's five major select sales of 2-year-olds in training in California, Florida, and Kentucky soared to a record high of 40.2% while increasing for the fourth year in a row. There was some good news, however, as gross revenue, average, and median all increased. The upswings ranged from 4.2% to 16.9%. The select sales' brutal buy-back rate is causing some consignors to reconsider their marketing strategies. Rather than trying to rush all their best athletes into the elite auctions of February and March, they might hold some back to offer later. Because most buyers at non-select sales have limited budgets, the most suitable candidates are good-looking, fast-working horses that were purchased for low to moderate prices as yearlings. "It's a real viable option," said Walter Burke of Valley View Farm during Fasig-Tipton's Midlantic auction. "It's hard to bring a 2-year-old here that you paid $250,000 or $300,000 for as a yearling, but some of the ones that you bought in the $40,000 to $50,000 range can stand out here like sore thumbs." Valley View Farm sold an End Sweep colt at Fasig-Tipton Midlantic for the sale-topping price of $280,000 after purchasing him as a yearling for only $53,000. He originally was entered in Fasig-Tipton's select Calder auction in February, but was scratched after missing valuable training time because of a dental problem. Valley View also sold an Honour and Glory filly for $60,000 at Fasig-Tipton Midlantic that was purchased as a yearling for $47,000. "We showed the two horses to 67 different people, and at all the other 2-year-old sales I've experienced up to this point, we haven't shown our horses nearly as much," Burke said. "Fasig-Tipton Calder is the best 2-year-old sale in the country, but it's starting to fall into the same syndrome that the Keeneland July yearling sale did. It's starting to scare away a lot of buyers because they are afraid that the prices are going to be so exorbitant. Because of that, they are starting to look at the secondary markets, where they can go with a couple of hundred thousand to spend and think, 'I'm going to be able to buy one of the best horses in the sale.' " Florida pinhooker Becky Thomas, returning to the Fasig-Tipton Midlantic sale after an absence of several years, said she planned to point some of her yearlings purchased in the $30,000 to $40,000 range to the 2003 edition. The aftermath of last Sept. 11's terrorist attacks and economic uncertainty here and abroad did not appear to have a dramatic effect on the market for 2-year-olds in training at any level. In some cases, they ended up working in the favor of some juvenile consignors. Pinhookers like Shari Eisaman and Jackie Castrenze said they were able to buy yearlings in 2001 more cheaply than usual. The low prices made those horses easier to resell for a profit as 2-year-olds.