Keeneland's September yearling sale will test the Thoroughbred market's resilience

With months of evidence to support the notion that the Thoroughbred marketplace is recovering, the annual Keene land September yearling sale is expected to be a good indicator of whether steady progress will continue.

As the world's largest yearling auction, Keeneland's September exercise is considered the official barometer of the state of the commercial industry during the current climate.

While upswings have become the norm in the Thoroughbred sales arena after a correction that lasted nearly four years, the 11-session September sale, which begins Monday and runs through Sept. 21, could reveal more bright spots or ills in every segment of the market.

By and large, the results of the past 15 months have improved the mind-sets of a majority of sales participants. Production costs born out of lower stud fees are down, as is the overall supply of horses — factors that are helping to get horses sold and providing sellers with a better return on their investments.

The juvenile sales season and results from earlier yearling auctions have shown there still is ample demand for quality offerings. Perhaps most importantly, the general upticks during the past year indicate that buyers are not only returning to the fray but are willing to reinvest.

"I think the supply and demand is really kicking in right now; that's where a lot of it is driven by," said Pat Costello of Paramount Sales. "Maybe I'm just seeing positive stuff happening in racing, but a lot of the big tracks like Saratoga and Belmont, numbers were up across the board. A lot of the bigger outfits are having a very successful year here in America, and they're going to want to restock again."

Added Joe Seitz of Brookdale Sales: "We're hoping a little less supply will translate into better returns. It's too early to know that, but traditional economic thought would say yes."

The boutique nature of Fasig-Tipton's Saratoga select yearling sale in August makes it difficult to draw substantial conclusions. Still, certain aspects of that auction could be factors in determining whether Keene land's September sale posts overall gains for a third consecutive year.

While Sheikh Mohammed bin Rashid al Maktoum and his representatives led all buyers in Saratoga, the ruler of Dubai didn't dominate as he has in years past, leading to a wider spread of buyers at the top end.

On the flip side, the Saratoga sale showed how crucial it remains for sellers to maintain reasonable reserve prices, as the rate of horses not sold rose from 22 percent in 2011 to 34 percent this season.

"When people can go into the sale and have a sensible idea of what their horses are going to make and a realistic expectation that they are going to get sold if they put a reasonable reserve on them, you have a healthier market," said bloodstock agent Lincoln Collins. "We've been through a period here where you could look at a horse and say, 'I think it's worth X,' but you had absolutely no idea. Hopefully as this sale wears on, consignors can be more and more confident that there won't be one person against the reserve or no buyer at all."

With the reduction in the foal crop, Keeneland has cut the size of this year's September sale, cataloging 3,604 yearlings compared to 4,319 in 2011.

Another notable change is that the select portion of the sale is going from two sessions to one, on Monday evening, with 132 offerings in the catalog.

Because the level of quality among the Book 1 and Book 2 horses is becoming more negligible, some wouldn't be surprised to see the select portion of the sale disappear.

"I think what it will eventually go to is just one book that encompasses what we see as Book 1 and Book 2," Collins said. "The market seems to say they prefer to have a sale with all the quality horses in one book, and they'll select the ones that are really good."

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