Polarization: it's a word used constantly for the last six months to describe the North American and European auction marketplace. Here is what it looks like.
Fueled by the $1.6 million, grade 2-winning filly Mrs McDougal and a $1 million American Pharoah short yearling and half brother to top sprinter Caravaggio during the Keeneland January horses of all ages sale, and the 1.9 million guineas ($2,845,070) for the promising 3-year-old colt Willie John (by Dansili) at Tattersalls, plus others from the Markus Jooste dispersal, the five major January and February mixed sales in Kentucky and Europe registered gains of nearly $10 million (19%) over last year's corresponding sales.
But the high prices distort the stark realities at the lower levels of the North American and European commercial auction marketplace. Of the 1,004 foals of 2017 (short yearlings in 2018) that sold in all 2018 mixed sales, more than 500 of them sold below the 2018 mixed sale median for 2017 foals, calculated by BloodHorse as $9,138 (converting the European sales to U.S. dollars). The big seven-figure sales make headlines, but more than half of the 2017 foals sold did not even bring $10,000. Nobody's making money on those.
In the context of the calendar year, the five major January and February mixed sales (Keeneland January and Fasig-Tipton February in North America; Tattersalls, Goffs, and Arqana February sales in Europe) constitute less than 5% of the annual gross in the North American and European auction marketplace.
But really these five sales are a continuation of what my team classifies as "second-half calendar year mixed sales" from 2017—the same five sales companies' November and December sales, plus smaller regional mixed sales.
Both sets of sales include foals of 2017 and mares in foal to 2017 coverings. My team calculates last year's North American and European mixed sales (October-December) grossed $506 million. The five January-February mixed sales grossed $62 million, or 11% of the combined total for the mixed sales we've counted (our $62 million total does not include Barretts and Ocala Breeders' Sales mixed sales in 2018). So, in the context of foals produced in 2017, and mares covered in 2017 and sold by one of the five major auction houses between October and February, these five winter mixed sales should be a continuation of the trends we saw in the fourth quarter of 2017, as well as being a bridge to the North American/European 2-year-old sales.
Let's begin with the European sales this month: Tattersalls in Newmarket Feb. 1-2, Goffs in Kildare Feb. 6-8, and Arqana in Deauville Feb. 13-14.
The dispersal of horses owned in partnership by Markus Jooste dominated the Tattersalls and Arqana sales. Seven fillies or mares at Tattersalls brought more than 200,000 guineas, of which five were from the Jooste dispersal. The other two were Thetis (550,000 gns, $819,531), the final filly from the Ballymacoll dispersal, and Longing (220,000 gns, $327,813), from Juddmonte. The five top Jooste horses brought 3.72 million guineas, and the sale total grossed 8,037,150 gns, up 40% from last year (and almost triple the gross of two years ago, by the way). Just those five Jooste partnership horses, however, did constitute 46% of the sale's gross.
At Arqana three horses brought €200,000 or more, and two of them were Jooste partnership horses. Combined, 912 horses sold in the three sales (converting guineas to euros) grossed €17,053,000 (about $21 million)—a 21% gain over 2017—and averaged €18,698 (about $23,000), a rise of 24%. Eleven horses sold for 200,000 (of their respective currency) or more, seven of them Jooste partnership horses, which grossed €4,874,720 (about $6 million) among them. If those hadn't been in the sales, 905 horses would have grossed €12,178,220 (down 13% from 2017 at about $15 million) and averaged €13,456 (down 10% at about $16,500). There's a measurement of the impact seven top sellers can have on a market, in which 912 horses have sold.
The situation in the U.S. is different in one very important respect: America is a bigger and broader marketplace. There were 2,157 horses cataloged between Keeneland January and Fasig-Tipton February, of which 1,273 sold (59%). At the three European sales, there were 1,431 cataloged and 912 sold (62%)—there were roughly 50% more horses cataloged in Kentucky than in the three European sales combined. Whereas 11 horses brought 200+ (of whichever currency) in Europe, 36 brought $200,000 or more at the two American sales—more than three times as many, and it would have been nine times as many without the Jooste horses.
But here's what the numbers don't obviously broadcast. BloodHorse calculated the median price for all foals of 2017 (short yearlings) at all 2018 sales, which were the five previously mentioned, plus Barretts January and the OBS January mixed sale. A total of 1,430 short yearlings went through the rings at these seven sales.
Of those, 1,004 sold for a total of $25,439,180 and an average of $25,337 (including the $1 million American Pharoah colt). But barely 25% of them sold for more than the $25,337 average, and the median, for the 1,004 short yearlings sold, was $9,138. That's 502 yearlings sold for less than $9,138. Ten times as many short yearlings sold for less than $9,138, as all horses—yearlings, fillies, and mares—that brought 200,000 (of their respective currency) or more.
Overall the highest median for any of the five sales was Keeneland January at $12,000. Others were Fasig-Tipton at $10,500, Tattersalls at 7,000 gns ($10,633), Goffs at €6,650 ($8,002), and Arqana at €4,000 ($5,299). A total of 2,185 horses sold in the five sales. That means at least 1,042 of them sold for $12,000 or less.
In my opinion the results of the 2018 winter mixed sales makes for pretty uncomfortable reading and shows why, for breeders as well as for racehorse owners, you need to hit home runs to survive.
To read Bill Oppenheim's columns and see Year-End 2017 APEX sire ratings plus Brianne Stanley's Weekly Sales Ticker, please visit www.billoppenheim.com.