Feel Good Story of the Year: Keeneland January Sale

Published in the Jan. 19 issue of The Blood-Horse
Are you tired of reading stories about mare reproductive loss syndrome? Do you wish all the reports about Osama bin Laden, the war in Afghanistan, and the struggling economy would just go away?

Here, finally, is some good news: Keeneland's January horses of all ages sale turned in a performance that was better than expected.

Just about everyone thought the negative trends in Keeneland's November breeding stock market would emerge again during Central Kentucky's first major sale of 2002. But the January auction showed surprising vigor even though it wasn't a slam-dunk success.

While gross revenue fell by nearly $5 million, both the average and median registered solid increases, and the buy-back rate dropped significantly. The sale produced its second-highest price in history when 1995 Breeders' Cup Sprint (gr. I) winner Desert Stormer sold for $3.6 million. (The record is held by Mackie, who brought $5 million while in foal to Mr. Prospector in 2000.)

On the second day of the auction, held Jan. 7-10, John Stuart of Bluegrass Thoroughbred Services sold all 12 of the horses he sent through the sale ring.

"The market was so strong that not only did the horses bring what we thought they should, they brought a little bit more," Stuart said. "We had a mare that was priced around town for $300,000 last summer, and she brought $480,000. There was another mare that we thought would bring $30,000 or $35,000, and she brought $48,000. And there was a 2-year-old broodmare prospect with a plate in her leg that we thought was worth $2,000 or $3,000 that brought $7,000. We were pleasantly surprised."

Stuart was not alone in his experiences.

"I've talked to several consignors that had 100% clearance rates, which shocked them a little bit, I think," said Geoffrey Russell, Keeneland's director of sales. "Just about everybody was telling me that their reserves were being met and exceeded."

To Russell Jones of Walnut Green, the key was a change in attitude on the part of sellers.

"People have gotten very realistic about what they think their horses are worth," Jones said. "The last two sales here, in September and November, were pretty sobering. They were great at the top end, but for the everyday horse, they were tough. People have just gotten more conservative in setting their reserves."

January's final figures, with comparisons to 2001, were as follows:

* The number offered plummeted 32%, from 1,667 to 1,134.

* The number sold plunged 22.5%, from 1,207 to 936.

* The gross dropped 12.5%, from $39,657,700 to $34,688,000.

* The average grew 12.8%, from $32,856 to $37,060.

* The median increased 21.4%, from $10,500 to $12,750.

* The average for broodmares advanced 7.3%, from $41,497 to $44,524.

* The average for yearlings shot up 37.7%, from $18,997 to $26,155.

* The buy-back rate fell from 27.6% to 17.5%.

The number of horses sold for $1 million or more rose from one to three, the number for $500,000 or more slipped from seven to five, and the number for $100,000 or more fell from 76 to 63.

(Not included in the figures is a stallion share in Fit to Fight that sold this year for $1,200.)

"We've seen a lot of buyers that we've never seen here before," said Keeneland's Russell. "Our credit department has been very busy with the establishment of new accounts at different ranges from all over North America. The auctioneers are telling us that there is interest in just about every horse. This is very positive for the industry."

In general, buyers were upbeat. Many said they were encouraged by rising purses and the growth of casino-style gambling at racetracks. Some, like Bruce Hill of Padua Stables and Becky Thomas of Lakland, needed mares to fill the books of their regional stallions. Ben P. Walden Jr. was among those lured by the prospect of bargains in tough times.

"With the January catalogue being fairly weak and the yearling sales enjoying only moderate success last year, we thought there might be some opportunity here to buy some value, but we found ourselves to be wrong," Walden said. "The quality in spots sold at a strict premium. We had two or three mares picked out on Tuesday (Jan. 8) that we thought would cost $100,000 to $125,000. We stretched to $135,000 or $140,000, and they wound up bringing $160,000 to $175,000. We did buy a couple of nice yearlings, so we didn't get shut out. But it wasn't easy."

Traditionally, Keeneland's January sale has not been a premier event on the auction calendar. Even though blockbuster dispersals occasionally raise its profile, the sale primarily serves as a clearinghouse for breeders who need to reduce their Thoroughbred holdings for a variety of reasons, including tax considerations and partnership dissolutions. Consequently, the quality in its catalogue can fluctuate dramatically, and hardly anyone views its ups and downs as important signs of marketplace health. Still horsemen were encouraged by this year's few bright spots.

"I think the market was shocked in September and November by the Sept. 11 terrorist attacks," said David Mullins of Doninga Farm. "Now, I think we have finally gotten over that. People have readjusted, and they want to continue to participate in the horse business."

Continued...