F-T July Expected to Continue Market Upswing
The yearling market ended a four-year slump in 2011 and many horsemen are confident that the rebound will continue during the Fasig-Tipton Kentucky select yearling auction. The 2012 yearling selling season’s first major event is scheduled for July 10 in Lexington.
According to Terry Finley of West Point Thoroughbreds, which puts together racing partnerships, enthusiasm is on the upswing among buyers and they’re eager to start shopping for yearlings.
“It’s really been awhile since I’ve seen the kind of interest in racehorse ownership that we’re seeing now,” he said. “We bought around 20 2-year-olds earlier this year and they’re totally sold out, and we just bought a horse off the racetrack that sold out in three days.”
In Finley’s opinion, the bid by I'll Have Another to sweep the Triple Crown has provided a big incentive to enter the racing game. Even though the son of Flower Alley sold for only $11,000 as a yearling and $35,000 as a 2-year-old, he was able to win two of the sport’s biggest races, the Kentucky Derby Presented By Yum Brands (gr. I) and Preakness (gr. I), before suffering an injury and missing the Belmont Stakes (gr. I).
“He’s a horse that didn’t cost a lot of money, but won two classic races. You just can’t imagine how many people have picked up on that,” Finley said. “It’s something that we’re trying to keep hammering home to our investors, that you don’t have to be unbelievably wealthy to participate in the top end of the game.”
Trainer Kenny McPeek also has noticed growing interest in young horses among his clients. He reported July 7 that people already had contacted him about looking at his short list for the July auction. “In years past,” he said, “nobody would inquire before the sale. You always had to tell them, ‘Hey, don’t forget.’ ”
Such excitement might seem unusual because the American economy continues to struggle in the wake of the Great Recession, and controversies involving medication and other issues still plague racing. But Hanzly Albina of Blake-Albina Thoroughbred Services believes the sport has plenty of qualities that are attractive to big dreamers.
“You have the New York program (enhanced by casino revenues) and a lot of other good stuff out there,” he said. “In Kentucky, we’re kind of in limbo with purses, but at the end of the day, you can still win the Kentucky Derby and get a lot of money. That’s still a pretty major incentive and there are a lot of people who enjoy the sport who want to win the prestigious races.”
Fasig-Tipton cataloged 338 yearlings for the July sale. The number is up 11.6% from 2011’s total of 303. As of July 8, 38 horses had been scratched based on a list posted on Fasig-Tipton’s website.
“We’re always excited to kick off the yearling sales season and I think there are several reasons for optimism this year,” said Fasig-Tipton president Boyd Browning. “The 2-year-old sales were good and the private marketplace seems to be more active. Racing across the United States also generally seems to be healthy and it is particularly healthy in New York, where it’s better than it’s ever been. I’ve seen plenty of folks out here looking at horses and the preliminary reports indicate that we’ll have good, solid attendance at this sale.”
In 2011, the number of horses that were sold during the Fasig-Tipton July auction fell 21.4% from the previous year to 191. In addition, the gross revenue declined 27.5% to $13,349,000 while the average price decreased 7.8% to $69,890.
But setbacks weren’t across the board. The median price rose 20% to $60,000 and the buy-back rate dropped to 26.8% from 28.7% in 2011.
Kerry Cauthen of Four Star Sales is looking for improvement on that performance and he also predicted that the overall yearling market would be better this year. Even though the number of horses in the July auction is up, the foal crop size and supply of sale yearlings in general is down.
“My expectations are that this is going to be a nice, positive sale that will head in the right direction as will the industry overall,” he said. “The reason is very simple. We have fewer horses and we still need to fill races. To me, that is the driver. We’ve reduced the supply to a great degree and to fill their barns, people will have to get off the mark and pull their hands out of their pockets (to bid).”
The July sale will begin at 10 a.m. (EDT).
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