The reality of the situation has been known for quite some time. Now, the challenge is to try to make the best out of some less than ideal circumstances.
When the yearling and breeding stock sales saw their numbers plummet in recent months due in part to the economic crisis, the Thoroughbred auction industry braced itself for a similar downturn to wash over the 2-year-old marketplace.
Indeed, the Keeneland April 2-year-olds in training sale will hold the first of its two sessions Monday evening amid a decidedly mixed mood as the juvenile auctions have been down around 30 percent this season.
Considering the year started with the Keeneland January sale having its gross fall off by 53.4 percent, there is a definite sense among 2-year-old consignors that business — while not great — could be a lot worse.
While the lower middle market continues to suffer because of more discriminating buyers, there is still good money to be found for high-end prospects. At the Fasig-Tipton Calder sale in March, bloodstock agent John Ferguson paid $1.6 million for a son of Medaglia d'Oro.
"You know, I've watched stores and restaurant businesses close down and I'm watching the horse business stay pretty good," said Dean DeRenzo of Hartley/DeRenzo Thoroughbreds. "I don't think it's down that much, the good horses are still selling good.
"I'm not really down about the 2-year-old sales at all because I think it's holding its own market well, especially considering the way the economy is now."
Although 216 horses were cataloged for the two-day Keeneland April sale, 69 horses have already been withdrawn from the auction.
One horse that is certain to draw a good deal of attention, however, is Vallenzeri — the first foal out of former Horse of the Year Azeri.
Vallenzeri, whose sire is another former Horse of the Year in A.P. Indy, earned a bit of infamy last fall when he was bought back by the Allen E. Paulson Living Trust for a record $7.7 million at the 2008 Keeneland September yearling auction.
Complicating the matter further is the fact that Bloodhorse.com recently reported a superior court judge in California ruled that Michael Paulson, son of Allen Paulson, should be removed as trustee of his late father's living trust.
Despite such baggage, Eddie Woods, who is consigning Vallenzeri, feels the colt's quality should put any reservations buyers might have about his history on the backburner.
"There has been a bit a change in the guard in the trustee thing and, you know, if nothing else that has maybe given people something else to think about," said Woods, who watched Vallenzeri work an eighth of a mile in :101⁄5 during the breeze-up show on April 2. "For the people that want to buy this kind of horse, if they want him they'll step in there. He's a spectacular horse. We'll wait another 10 years to get another horse like this who is the whole package."