11/13/2003 12:00AM

Keeneland sale tribute to optimism


LEXINGTON, Ky. - The Keeneland November breeding stock sale took everybody by surprise this year by ringing up enormous gains across the board and setting world-record prices of $7.1 million for a broodmare and $2.4 million for a weanling.

The 11-day auction, which ended Thursday, sold 2,614 horses for $236,070,900, up 26 percent from last year's 10-day sale, when 2,377 lots sold. The 2003 average price of $90,310 outpaced last year's by 15 percent, and the $32,000 median was 14 percent up from last year.

Buy-backs were up slightly this year, rising to 22 percent from last year's 20 percent.

The sale got off the mark with two explosive select sessions on Nov. 3-4. On opening day, Coolmore Stud and Padua Stables sent the broodmare Cash Run through the ring to dissolve their partnership in her. The result was a ferocious bidding duel as each of them tried to keep the 1999 Breeders' Cup Juvenile Fillies winner, who was in foal to Storm Cat. Coolmore finally prevailed at an official price of $7.1 million, but as each of those bidders also owned a half-interest in the mare, Coolmore in effect would have to pay only $3.55 million for her.

The world-record weanling price of $2.4 million was for a Storm Cat colt out of Spain, the 2000 Breeders' Cup Distaff winner and North America's all-time leading female earner. Gerry Dilger signed the ticket moments after buying Spain herself, in foal to Storm Cat, for $5.3 million.

At the second session, Windsharp - dam of Johar, the 2003 Breeders' Cup Turf winner - brought $6.1 million from Sheikh Mohammed al Maktoum's representative John Ferguson. Windsharp sold in foal to Gone West, meaning she was carrying a full sibling to Johar.

After that strong opening, the 2003 auction continued to put up strong numbers, surpassing last year's 10-day total just six days into the selling. It wasn't until the next-to-last session that the bullish sale saw its first decline, when the Day 10 median slipped from $5,000 to $4,500. The market's overall strength surprised buyers and sellers at almost all levels, and Keeneland's director of sales, Geoffrey Russell, was likewise impressed.

Asked what he thought was fueling the market, Russell said, "Optimism."

One thing that might have made breeders optimistic in November was the yearling market's strong performance overall this year.

"Our September sale was certainly stronger than anyone expected it would be," Russell said, "and I think that has encouraged people to buy now. The top end was much stronger than I thought it would be, and that gave people confidence in the next level down to bid, and it just kept rolling through to the end."

Politicians seek to wipe out sales tax

While Keeneland was celebrating its impressive auction gains, the Kentucky legislature's Horse Farming Subcommittee discussed plans to propose eliminating the commonwealth's 6 percent sales tax on auction purchases by Kentucky horsemen.

The subcommittee's co-chairs, Democratic state representative Susan Westrom and Republican state senator Damon Thayer, have said they will press for the measure.

Westrom told a public hearing in Frankfort Wednesday that she would sponsor or co-sponsor a measure to eliminate the sales tax on young stock when the legislature convenes in January. Currently, yearlings and horses of racing age bought at Kentucky auctions are exempt from state sales tax only if the buyer ships the horse out of state soon after the sale or if the buyer is not a Kentucky resident.

"My intent is to bring to light the importance of the equine industry, which is part of the agricultural community and hasn't been perceived as such," Westrom said. "I think it should be treated as fairly as other livestock producers."

Thayer, who also is an executive with Breeders' Cup Ltd., already has pre-filed bills to eliminate the state's 6 percent sales tax stud fees and on farm supplies such as fencing and horse feed.

But the measures could face a battle at a time when Kentucky, like other states, faces budget shortfalls. On the same day as the Horse Farming Subcommittee's public hearing, outgoing Kentucky Gov. Paul Patton released a state budget report warning that the commonwealth faces a $710 million shortfall in 2004. Patton will be succeeded in office by Republican Governor-elect Ernie Fletcher in 2004.

Westrom said she felt the measure would be "revenue-neutral" because it likely would encourage out-of-state owners to leave horses in Kentucky.

Kentucky derives an estimated $20 million annually from horse-related taxes.

Mongoose to relocate in Florida

Gary and Mary West's Grade 1-winning stallion Mongoose is headed for Florida. The Wests have decided to relocate him from John Sikura's Hill 'n' Dale to William Schettine's Signature Stallions near Ocala, Fla. Mongoose will stand in Florida for a 2004 fee of $4,000, down from his $5,000 fee this year in Kentucky.

Mongoose is a 5-year-old son of Broad Brush and the Cox's Ridge mare Salty Gal. He won last year's running of the Donn Handicap and the 2000 Cradle Stakes. During his racing career, he also finished second in the Grade 1 Gulfstream Park Handicap and third in the Grade 2 Spiral Stakes. He retired in 2002 with a career race record of 17-6-2-2 and more than $694,000 in earnings.