Ultimately, the 2009 Keeneland September yearling sale truly did live up to expectations.
In the year since the financial crash hit the nation full force, the Thoroughbred marketplace has been a prime example of the hardships facing businesses — particularly those fueled by discretionary income.
Such struggles were demonstrated again during the two-week September auction as the world's largest Thoroughbred yearling sale ended Monday with its lowest overall gross since 1998.
Total receipts of $191,859,200 were down 41.5 percent from the $327,999,100 generated in 2008, while the average of $60,734 was a drop of 33.2 percent.
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"We are going through a painful correction, and no one is exempt," said Geoffrey Russell, Keeneland's director of sales. "I think the major problem with our industry right now is the lack of available capital. The lines of credit have dried up and ... this is a cyclical market. You have up years and bad years."
Although last year's auction took its share of hits, it was spared the brunt of the declines because the economic crash happened while the sale was in progress.
In addition to the lack of money available to many of its participants, the Thoroughbred market — which has been down between 20 and 40 percent in the past year — is suffering from an oversupply of yearlings that were bred when stud fees were at their peak.
"I think we had to get through this sale, and we have to get through (the breeding stock sales) and then everything can start correcting," said Mark Taylor of Taylor Made Sales, which led all consignors by gross for the sixth consecutive year. "There are people who are going to be suffering because the foal crop of 2009 was the last one that really had stud fees based upon the market being high.
"I don't know if we've hit the bottom yet or not," Taylor said. "Think of it like childbirth — we're like halfway there, but we're not done yet."
The middle market, where players are most affected by the economic strain, has been a vulnerable spot for some time. However, the lack of top-end buyers was an especially troubling trend at the September sale. The auction produced just four seven-figure horses — the lowest total since only two were sold in 1997.
John Ferguson, agent for Dubai ruler Sheikh Mohammed bin Rashid al Maktoum, led all buyers with 34 horses purchased, including 31 during the first two days. Still, some consignors and buyers contended that the quality of horses in the select portion was not as good as in past years.
"There were some I thought stacked up, but there was maybe not as much depth," trainer D. Wayne Lukas said.
Others, however, attributed the lack of high-dollar horses to the opinion that only a few buyers can bid successfully at the top level.
"I heard rumors (about the lack of quality), but I saw a lot of very nice horses go through there the first two days," bloodstock agent Buzz Chace said. "A lot of people sit on their hands, but ... the opportunities were there if you wanted it."
With a majority of horses not being sold for profit, many breeders saw the September auction as proof that stud fees need to come down further.
"I think we're going to have to look at stud fees and look at the mares we mate and maybe not mate all the mares we did last year," said Jane Lyon of Summer Wind Farm, breeder of the Storm Cat colt that sold for a sale-topping $2.05 million. "If you're not getting your stud fee back in the marketplace, you can't keep paying it."
Number sold3,605 3,159
Number not sold1,190 1,201
Gross sales$328.0M $191.9M
Average price$90,984 $60,734
Median price$37,000 $22,000
Top price$3.10M $2.05M