Weather and prospects looking up for Keeneland horse sales

OPTIMISM ABOUNDS for year's first auction

awincze@herald-leader.comJanuary 9, 2012 

The 2012 Keeneland January Horses of All Ages Sale doesn't start until Monday, but already the differences between it and recent editions are hard to miss.

Bitter cold and occasional snow normally serve as the sale's backdrop; instead, consignors and buyers found themselves stripping off jackets while walking through barns during this weekend's sunshine and unseasonably mild temperatures.

Mother Nature's tone was not the only thing on the upswing. For the first time since 2008, the eve of the first major horse auction of the year found its participants discussing the market's recent progress instead of bemoaning its well-documented struggles.

The light at the end of the tunnel appeared for the Thoroughbred marketplace in 2011. After four years of white-knuckling it through a major correction brought on by the global economic downturn, the season ended with strong gains in the yearling and breeding stock sales, capping 12 months that saw increases in virtually every major avenue of the industry.

Fittingly, it was the 2011 Keeneland January auction that helped kick off the run of marketplace stability, as last year's exercise concluded with gains in gross and average. In keeping with the recent aim of getting the supply in line with demand, this year's sale is one day shorter than its predecessor, with 1,594 lots cataloged, and also appears to feature better-than-usual pedigrees for an exercise considered the blue-collar sibling of the elite November auction.

"I think the market has stabilized, first and foremost," said John Sikura of Hill 'n' Dale Sales Agency in Lexington. "If you're buying or selling into it, you want a stable, sound market, and I think we've achieved that. The world has changed in the fact that the value of horses is different today than they were two to three years ago, and I think people are now firmly aware of that.

"Reserves are different and levels of trade are different, but I think as long as people understand today's values, there is real commerce that happens." Now that trade is commencing at a respectable rate again, sellers hope their days of making a steady profit will return, too.

In the throes of the correction, simply getting horses sold became the focus for many as they were desperate to get away from the hefty costs that came with holding onto their stock for another season.

Production costs have improved greatly in recent years, however, as farms slashed stud fees, and less commercial horses were weeded out of the ranks. There is also a greater sense of buyer confidence in the marketplace, a trend that especially showed itself during the Keeneland November sale, where horses at all levels were bringing stronger-than-expected prices.

"Last year there were a lot of people looking to sell (newly turned) yearlings and weanlings privately, where this year it seems like there are more people wanting to hold them for the market," said bloodstock agent Davant Latham. "To me that indicates the sellers aren't as tight as they were, and they think we're out of the trough.

"It's still a tough game because the banks aren't lending ... but I think that it's still going to be strong for the right short yearlings. I tried to buy in November and I was not nearly as successful as I'd like to have been."

The Keeneland November breeding stock sale yielded gangbuster results, with 23 of the horses selling for $1 million or more, including Breeders' Cup Ladies' Classic winner Royal Delta for $8.5 million. But some still caution those numbers were spurred largely by the catalog having boutique dispersals from the estate of the late Edward P. Evans and Prince Khaled's Chanteclair Farm.

"I hold those numbers to be in some way reflective of a unique sale," Latham said. "I'm not sure overall our market health is as good as November indicates."

Still, domestic buyers as a whole are regaining their footing, and those who were shut out of the competitive action in November could be looking to fill their orders during the next several days.

"The guy who had a small business with some discretionary funds, ... we lost him for a few years, but we're starting to see that guy come back," said Tommy Eastham of Darby Dan Sales in Lexington. "Of course, we're not back to where we were, but we're definitely headed in the right direction."

Reach Alicia Wincze Hughes at (859) 231-1676 or 1-800-950-6397, Ext. 1676.

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