Even when the Thoroughbred marketplace was in the worst throes of its correction, faith that a recovery would take place was never a question of if; it was when.
The latest test comes Tuesday, when Fasig-Tipton holds its one-day July yearling sale in conjunction with an 80-horse dispersal of stock from Corinne and Bill Heiligbrodt.
A true assessment of the yearling market won't come until after Fasig-Tipton's select August sale and Keeneland's two-week September exercise have come and gone, but the July sale often serves as a heads-up for participants to what trends might be in store in the months ahead.
Last season saw the overall gross of the July sale decline by 12 percent from 2009, although 83 fewer horses were offered. In an effort to get supply back in line with demand, this year's sale also has been tightened up, with 303 yearlings cataloged compared with 341 a year ago.
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"The one thing we are in the first year of seeing is the reduced production of the foal crop," said Bayne Welker, vice president of sales for Fasig-Tipton. "We are definitely in another year of seeing a little bit less of overhead costs in reduced stud fees, so hopefully we are to the point where the breeder is in a better position than he has been in the last couple of years to be able to gain some type of profitability."
The lead-in juvenile auction season provided some positives for the yearling market to potentially build on and some pitfalls it must overcome. The Ocala Breeders' Sales auctions in March, April and June all posted increases in gross, but the clearance rate at some auctions forced many sellers of 2-year-olds to take a lot of their offerings back home. The Fasig-Tipton Florida Select juvenile sale had a buyback rate of more than 43 percent. Because yearling-to-juvenile resellers often make up a key segment of buyers at the July sale, holding onto more juveniles than they had planned to could affect how active the resellers are in buying new stock.
"There are a lot of horses available at the 2-year-old sales, and a lot of them go unsold," bloodstock agent Mike Ryan said. "It's still a difficult market. About 35 to 40 percent of the horses in those catalogs don't change hands. That is a lot of inventory that is being carried around by the pinhookers."
Considering that buyers can now get horses for much lower prices than they could a few years ago, a common hope is that the correction has helped bring in new players seeking to take advantage of the value.
The general stability that has come through in the middle market is some proof that more people are starting to raise their hands inside the sales area.
At the top end, however, it has been difficult to find new names on the sales sheets.
"I feel there are definitely more new people who have either been around the game and have started to put their foot in or truly new people coming in," said Kerry Cauthen of Four Star Sales. "You don't have that mentality of, 'I can just wait until next year; we can buy it and it will be five cents on the dollar.' This is the dollar and it's only going to go upwards from here.
"But even people with an extreme amount of disposable income don't want to feel like they're overpaying, either. Now they say, 'Maybe I go to $800,000 on that one,' and put their hand down after that."
The Heiligbrodt dispersal, featuring horses of all ages, will be handled by Bluewater Sales. The 80 entries will be offered in a single session immediately after the yearling auction.
"I think it will bring some people into this sale who maybe would have been in the October (fall yearling) sale and would have been a buyer that bought on that scale," Welker said. "But they also might think, 'Hey, I like the yearlings here too.'"