Horse sales

Market momentum drives higher price at Keeneland November breeding stock sale

awincze@herald-leader.comNovember 14, 2013 

The 10-day Keeneland November breeding stock sale, which ended Thursday, started with high expectations and proceeded to exceed them.

The history of Thoroughbred sales dictates that as the yearling market goes, so goes the breeding stock market. Riding a wave created by Keeneland's best September yearling auction since 2008, the November sale provided more evidence of market recovery, posting across-the-board, double-digit gains over its 2012 numbers.

The further the industry gets from the debilitating economic crash of 2008, the healthier things stand to look. As was the case during the September sale, domestic and international buying power converged with near equal vigor to pursue offerings at every level.

Five days into selling, gross receipts for the November sale surpassed totals for last year's 11-day auction.

The overall gross of $197,189,000 from 2,457 head sold represented a 37.87 percent gain from 2012 levels while the increases found in the overall average ($80,256) and record-tying median ($35,000), which concluded up 35.46 and 59 percent respectively, most illustrated the intangibles behind the gains.

"I don't think anybody anticipated to have the same growth in November that we had in September, so this is phenomenal," said Geoffrey Russell, Keeneland's director of sales. "Obviously we are very, very pleased. It started off with the Book 1 horses really setting the stage, and we started seeing in each day roughly the same increases in the percentages. That's very, very positive for our industry.

"It's not just carried by one thing, it's all levels of the market are rising. I know people get tired of the phrase that a rising market raises all ships, but it's true that every level is going up."

Several factors converged to produce the collective gains the Thoroughbred market has enjoyed in 2013, and those factors figured prominently in November.

Supply and demand brought on by the diminishing foal crop remains the powerful engine pushing the market upward. There has also been a surge in activity from newer buyers looking to stock their broodmare bands as well as renewed participation from those who may have lessened their spending during the leaner times.

Chile-based Don Alberto Corp., which recently purchased Vinery in Lexington, was among such aggressive shoppers, leading all buyers with 32 horses purchased for $10,640,000. The trickle down affect of confidence on both ends was most seen in the clearance rate as the cumulative buy-back rate came in at just 15 percent compared with 23.32 percent in 2012.

"I think there is more confidence for a seller to bring a good horse to market," Russell said. "Closer to 2008 they had lost that confidence level because they didn't know if there would be anybody there to meet them. Now we're showing them that there is confidence in the buyers to spend money on those quality mares."

The top end of the market remains a pillar with 14 horses selling for seven figures — double the amount that reached that mark a year ago. Grade I winner Awesome Maria sold to representatives of Coolmore Stud for a sale-topping $4 million, while champion Groupie Doll inspired the auction's most emotional moment when she went to Mandy Pope's Whisper Hill Farm for $3.1 million.

The collective reduction in stud fees during the economic downturn has widely been credited with giving breeders a chance to regain their financial footing. While some notable stallions will see their prices jump in 2014, the fact that many farms have kept their fees steady during this market recovery could be the biggest catalyst toward continued growth this coming year.

"The market does run in cycles, and we hope we are on the upward end," Russell said. "With stud fees if they stay relatively constant ... people will get more return and they will reinvest. It's been a long road for a lot of them. Now they're looking at a longer view."

Alicia Wincze Hughes: (859) 231-1676. Blog: Twitter: @horseracinghl.

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