Keeneland November sales reflect market uncertainty

The 13-day run that was the Keeneland November breeding stock sale could easily serve as a microcosm for the current state of the Thoroughbred marketplace.

While there were definite flashes of confidence within the sales arena, overall uncertainty still reigns within the commercial industry.

For a third consecutive year, the Keeneland November sale suffered downturns in its total numbers as the final session of the auction wrapped up Saturday.

Despite some strong activity at the top end and active participation from international buyers, the overall gross of $147,392,900 was down 7.7 percent from 2009 despite sales of 150 more horses than last year.

The average of $50,322 came in down 12.4 percent, while the median of $17,000 declined by 15 percent from the previous season. The rate of horses not sold was 22.51 percent, up slightly from 21.59 percent in 2009.

Typically, success in the yearling market translates into similar results once the breeding stock sales get underway. Thus, when the Keeneland September sale posted across-the-board gains this season, there was hope the buyer confidence would carry over.

Even though this year's Keeneland November auction boasted a total of eight seven-figure horses — three more than in 2009 — the strength at the top couldn't make up for shoppers who are hesitant to invest their long-term dollars in broodmares who don't have proven pedigrees or produce records already on the catalog page.

"This market is still a little tenuous," said Elliott Walden, president of WinStar Farm. "We've bought some mares that we felt were fairly priced, but any time you try to buy a nice horse you're going to have to pay for them.

"I think the closer people get to the racehorse market (yearlings and juveniles), the more comfortable they feel spending money right now."

While part of the downturn was attributed to the fact last year's Keeneland auction was bolstered by the depth-laden Overbrook Farm dispersal — which accounted for more than $31.7 million in gross receipts — there is still a lack of credit in the marketplace as well as a number of sellers willing to forgo making a profit for the sake of just getting their horses into new homes.

"I really think the biggest part of it is people being forced to sell to settle debt," said Mike McMahon of McMahon Bloodstock. "I think the farms bring mares to sell they wouldn't normally want to sell, and they're selling them under the pressure of it's got to sell.

"It's like, 'I think my mare is worth $50,000 but I have to sell it, so I put a reserve in at $20,000.' People are in a situation where they can't reserve their horses so it brings the whole market down."

One positive from the November results was the increased presence of overseas buyers who were eager to take advantage of the favorable exchange rate. Of the eight seven-figure horses, six were purchased by international shoppers.

"There is no doubt the exchange rates make it worthwhile," said Australian bloodstock agent James Bester, who purchased multiple Group III winner Carribean Sunset for $1 million. "With the exchange rate the way it is, we are able to compete more aggressively here."