Stallion-Season Market Not Immune to Crisis

Uncertainty stemming from mare reproductive loss syndrome, and the subsequent moratorium on prospective foal insurance that has been in effect since early May, are expected to impact the no-guarantee stallion-season market in 2002.

For this year, the situation already has led Fasig-Tipton to cancel its stallion access sale of selected seasons, which had been scheduled for Aug. 10 in Saratoga Springs, N.Y. The decision was made early the week of June 4.

Stallion access representative Max Hodge said "the question marks that surround mare reproductive loss syndrome, the question marks surrounding the insurance, and the timing of the sale" were factors in Fasig-Tipton's decision. Last year, 27 seasons sold for $1.045 million at the auction, held the week of Fasig-Tipton's Saratoga select yearling sale.

Boyd Browning, executive vice president and chief operating officer at Fasig-Tipton, said the company simply "thought it better not to have the sale this year." Browning did say there are "signs of a restoration of confidence in the market" now that the cause of the syndrome has been identified.

Hodge said a live stallion-season auction is scheduled for Nov. 9, and that another one could be added this fall.

Meanwhile, some members of the breeding industry believe the foal-loss situation and insurance moratorium will impact the no-guarantee stallion-season market for next year, but just how much is open to speculation.

"I don't think it's too soon to tell that it will have an impact, and my guess is it will have a negative impact on the no-guarantee market for next year," said Ric Waldman, who represents the stallion interests of Overbrook Farm and Windfield Farm in Kentucky. "To what degree is the million-dollar question. The degree of impact would be the slightest if prospective foal insurance was attainable for next year at the same rates that it was for this past year, earlier on.

"The greatest impact on the no-guarantee season market would be if there was no prospective foal insurance attainable. My best guess is it will be somewhere between."

"If they continue not to write foal-in-utero insurance, or barrenness insurance, that will definitely impact the sale of no-guarantee seasons from the standpoint of perception, as well as insuring your risk," said Peter Bradley, a partner in Bradley and Bowden, a Lexington bloodstock agency.

Some breeders forgo prospective foal insurance when they buy no-guarantee seasons, and accept the risk of self-insuring.

"I think that the closer we get to the breeding season, the more confidence people will have in buying no-guarantee seasons if these mares seem to hold their pregnancies over the summer, and if there are no further problems," Bradley said.

Of course, the strength of the no-guarantee market won't be entirely decided by mare reproductive loss syndrome and the availability of prospective foal insurance. As always, market forces, such as results of the summer yearling sales due to begin the third week in July, will come into play.

"The season market usually reflects the yearling sales," Bradley said. "If our market weakens, I would have to think that the seasons prices will weaken also."

Prior to the unusually high incidence of early fetal loss that plagued Central Kentucky farms for about a month this spring, Bradley said he had noticed a weakening in the no-guarantee seasons market.

"Unless you had one of the ten most sought-after stallions, I thought the no-guarantee market was soft," he said. "There's just an overabundance of seasons on the market right now."