Monday, June 8, 2009

Yearling sale numbers down; prices to be up?

The Blood-Horse reports that Fasig-Tipton has catalogued 494 horses for its Kentucky July select yearling sale, down 13 percent from from last year's catalog of 568.

Will decreased numbers lead to increased prices, despite recession?

The law of supply and demand of course dictates the price of any commodity. So while the recession is tightening wallets across all economic sectors, including the wealthy, having 13 percent fewer yearlings from which to choose could offset somewhat a decline in prices that might have been anticipated in a sour economy.

Fasig-Tipton says the decreased number is by choice, not a product of fewer yearlings entered. Company president Boyd Browning said F-T "accepted fewer yearlings from a larger pool of horses nominated." He claimed that the sales company was "more demanding" in its selection for conformation and pedigree.

Down are the percentage of offerings from first- and second-crop sires. That means the percentage of yearlings from established sires is higher than normal.

Browning wasn't saying why that's the case, and I could be wrong, but I'm going to speculate that the mix is a conscious decision -- perhaps on the part of both F-T and sellers -- to hold back the youngsters from unproven sires until the economy improves.

In my mind, foals by proven sires are going to bring "a certain price." Their values are well-established by now, and perhaps the bottom can only fall so far on foals by sires and out of dams who are of known quality.

Often the "hot" young sires bring big prices at the sale. Buyers want in on the first crops of noted runners like champion Bernardini (pictured), Kentucky Derby winner Giacomo, or "name" runners from proven sirelines such as Bluegrass Cat, Flower Alley, First Sumurai and Henny Hughes.

But huge risk is also involved.

Because those freshman and sophomore sires are unknown quantities, there's no way to predict whether their foals are going to run well, or even that they're going to grow up straight, attractive and athletic by the time they're 2.

While this should go without saying, not every accomplished runner becomes a good sire, let alone a great one. There are many washouts, falling from the Kentucky roster into states like Pennsylvania, Louisiana or even much further down the racing-state ranks within a couple of years.

The best time to get big bucks from a weanling or yearling by a young sire is probably before any of his get have had a chance to prove whether they're any good.

And, there remain later 2009 yearling sales and the 2-year-old sales of 2010 to try and benefit from the "freshman bubble" on these sires, provided the economy improves enough to reinflate it by then.

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