09/04/2014 11:25AM

Keeneland September: High expectations for benchmark auction

Keeneland/Coady Photography
The Keeneland September yearling sale gets underway on Sept. 8.

A bustling middle market and overall sense of stability have put more horses and sellers in play for the 2014 edition of the Keeneland September yearling sale.

The North American Thoroughbred industry’s bellwether auction added an additional day of selling for this year’s renewal after the number of yearlings cataloged rose 7 percent to 4,181 entries. The 13 sessions that comprise the upcoming September sale will be the most since 2011.

“I think the September sale is the barometer of the Thoroughbred industry,” said Geoffrey Russell, Keeneland’s director of sales. “Having over 4,100 horses, this sale is going to be the test. Everything bodes well. The 2-year-old market was very good, and the yearling sales so far have been very good. There’s a great interest in horses and horse racing at the moment, so we hope the trends that we started two years ago keep on going.”

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The sale will continue with the select format introduced at last year’s auction, with Book 1 spanning the four opening-week sessions and featuring a total of 762 yearlings. Book 1 will take place Sept. 8-11 (Monday through Thursday) with sessions beginning daily at noon Eastern. The sale’s traditional dark day will be Sept. 12.

Book 2 will be held the following weekend, Sept. 13-14, with sessions beginning at 10 a.m. Eastern. Books 3-6 will continue daily Sept. 15-21 (Monday through Sunday), also beginning at 10 a.m.

From the time the Thoroughbred market began to bounce back from the collapse of 2008-09, industry members credited the rapidly shrinking foal crop, and in turn fewer offerings at auction, for the recovery. Popular opinion declared the shift in supply and demand would correct the market, and thus far, it has.

However, the yearling market of 2014 has not followed that pattern. The North American foal crop of 2013, which comprises this year’s September catalog, is estimated to be the smallest since the 1960s, continuing a downward slide to a foal count of roughly 22,000 for 2014, according to estimates from the Jockey Club. In spite of the shrinking foal population, the catalogs at recent yearling sales have grown considerably, including Keeneland’s.

Mark Taylor of consignor Taylor Made Sales Agency speculated that the positive results of last year’s auctions, especially in the middle market, might have drawn some breeders back into the fray who otherwise would have kept their horses at home.

“There were more people in 2013 that might have just said, ‘I’ve got this colt. I’m just going to break him and put him in a 2-year-old sale, or I’m going to run him,’ and now they’re saying, ‘The market was good. I might go in [to the yearling sales] and get $50,000 for this horse,’ ” Taylor said. “It’s probably horses worth $50,000 and below that are coming into the market. If you [consider] the six-figure horses, I don’t think there’s more of those around.”

Russell, along with many other consignors, also suggested that the influx of new horses to this year’s Keeneland sale likely is coming from smaller farms and regional markets.

The Keeneland September sale is widely recognized as a destination for international buyers, starting with the seven-figure price levels seen during the first few sessions all the way through to the final book of the sale. A horse from a regional breeding program potentially could draw more money out of a buyer from an emerging foreign market like South Korea or Russia than it would at a statebred sale or if lost in the shuffle at other marketplaces.

Washington-based bloodstock agent Dana Halvorson said the expansion of those foreign markets has had a residual effect on the North American bloodstock market, helping to maintain, if not drive up, the average price of a North American-bred yearling at auction.

“I think what’s made a lot of difference in the sales at Keeneland is that they’ve been very fortunate to have all these different countries participating in the sales, and that’s kind of saved the marketplace,” Halvorson said. “Some of the people that were spending $2,500 to $5,000 on yearlings from some countries are now spending $30,000 or $40,000.”

This year marks the second renewal of the September sale operating under the auction’s current blueprint for its select sessions.

The new setup, which essentially combines the first and second books of the old model, was lauded for putting a higher level of horseflesh in front of buyers who otherwise might have gravitated away from the boutique nature of the previous select format. A record median sale price at last year’s September sale backs that notion.

“We worked with our consignors to make sure the horses are going to be available here for the buyers when the buyers are here to look at them,” Russell said. “Having only 190 horses a day, it’s easier for people to get around and look at the horses and be able to make their decisions, and starting at noon has had a strong, favorable response.”

The second year of the new format also gives buyers a chance to better forge a game plan for inspecting the yearlings prior to the sale, having already gone through the process once.

“I think the process worked quite well,” pinhooker Eddie Woods said about the select format. “I think it worked better from the seller’s point of view than the buyer’s point of view. We go to Keeneland with a big team of people working, and when it gets down to the really hard days when the horses are only there a real short period of time, you have to be on the ball to get the right horses picked.

“With the format the way it’s set up now, the horses are there quite a bit longer, and everyone gets a good chance to get a look at them. It’s harder to steal one.”

Last year’s Keeneland September sale turned in the strongest economic performance since 2008, including a record-high median.

The auction cleared 2,744 yearlings over 12 sessions for revenues of $280,491,300, besting 2012 receipts by 28 percent. The average sale price finished at $102,220, marking a 17 percent improvement compared with 2012. The median sale price hit an all-time high of $50,000, eclipsing the previous record of $45,000 set in 2006 and 2012 by 11 percent.

The buyback rate held fairly steady from 2012 to 2013, rising from 19 percent to 20 percent.

“I think all levels of the market are doing very well, and that’s what makes the market so good at the moment. No matter what part of the market you want to play in, you have plenty of choices, and the quality is there, so that bodes very well for the buyers,” Russell said.

Last year’s sale topper was a War Front colt out of the stakes-placed During mare Blading Gold Ring, bought for $2.5 million. The colt, now named Treaty of Rome, was purchased by the Coolmore partnership and sent to Ireland.

To access a catalog, click here.