03/07/2014 12:53PM

OBS March: Expectations high for juvenile market

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Louise Renegal
Expectations are high for the juvenile market as the OBS March sale approaches.

Heading into 2014, the 2-year-old auction market is faced with a “good news, bad news” situation.

The bad news is that this year’s juveniles have a tough act to follow in the sales ring. This is especially true at the three Ocala Breeders’ Sales Co. auctions for 2-year-olds in training, which shattered records nearly across the board in 2013.

The good news is that even if figures remain stagnant or dip a little, they’ll still be among the highest in the past decade, both at OBS and on a national scale.

The OBS March sale of selected 2-year-olds in training will be the second stop on the juvenile sale calendar, following the Barretts sale of select 2-year-olds in training in California on March 3, which posted double-digit gains in gross, average, and median and was highlighted by a $1.15 million Giant’s Causeway colt purchased by Coolmore Stud.

OBS will hold its select juvenile auction Monday and Tuesday in Ocala, Fla., with each session beginning at 11 a.m. Eastern.

“Hopefully, we’ll pick up where we left off last year,” OBS president Tom Ventura said. “I think we have a very nice group of horses for the sale, and the graduates sure have come out running. I think it’s a good recipe for another strong sale to start the 2-year-old season [in Florida].”

Last year’s OBS March sale moved 185 horses for revenue of $28,794,000, a 16 percent increase over $24,739,500 from 180 sold in 2012. The average sale price was a record $155,643, up 13 percent from $137,442, while the median rose 25 percent from $100,000 to $125,000, also establishing an OBS March record.

A $1.8 million Smart Strike colt out of the Grade 2-winning Pulpit mare Mini Sermon was purchased by Stonestreet Stables to lead the 2013 sale.

The March sale was one of the first stops in the midst of a dramatically improved juvenile market last year, which continued in both the OBS spring sale of 2-year-olds in training in April and the June sale of 2-year-olds in training and horses of racing age. Each of those sales posted records in gross, average, and median. The latter auction also sold the highest-priced horse in its history.

Those breakthroughs helped drive a 21 percent growth in total sales for the overall North American juvenile market in 2013, with only 1 percent more horses sold for the year. The North American gross of $156,082,626 from 2,244 horses sold in 2013 was the highest since 2008, when 27 percent more horses were sold.

This healthy upper- and mid-market activity drove the average 2-year-old sale price to $69,556, a 20 percent jump from 2012 and the second-highest mark of the past decade. That followed an identical 20 percent increase in juvenile average price from 2011 to 2012.

Last year’s 2-year-old market helped carry on the positive course set by the sales of 2012, which took great strides in establishing the industry’s recovery from a lengthy recession. In turn, the 2013 juvenile sales helped establish even greater momentum heading into the 2013 yearling and mixed seasons, which were often record-setting in their own right.

“I think we have to be very optimistic about [the juvenile market] going into the season because the breeding stock sales have been very good,” consignor Niall Brennan said. “The January and February sales in Lexington were very good, even with horrible weather. It didn’t stop people from coming and buying horses.”

While the overall auction market has continued to climb since last year’s OBS March sale, Ventura remained realistic with his expectations for the upcoming renewal.

“It would be nice to have a repeat of [last year’s sale], but I don’t know how realistic that is,” he said. “I think we can look forward to improving off of last year, and that would be great. To have dramatic increases like we did last year, that’s something that you hope for but can’t really expect to happen coming off such a significant bump two years in a row.”

Consignor Danzel Brendemuehl of Classic Bloodstock agreed that the spike in the 2-year-old market will be difficult to duplicate in 2014. However, she said that a fairly recent influx of younger players and new money into a shrinking bloodstock market should at least help maintain its current status.

“I think what happened was we had a shortage of horses and some money on the loose,” Brendemuehl said about last year’s juvenile market. “Those things combined are like a high-pressure system and a low-pressure system combining for a tornado, so we had a tornado effect for buyers.

“I think there is certainly a healthy amount of interest in horses that are ready-made, and I think the 2-year-old market will do the same thing. I’m hoping people are a little more sophisticated in that they don’t just depend entirely on the breeze shows, but a good horse always stands out. They’re hard to hide.”

The expansion and success of sales of horses of racing age at OBS, Barretts, and Fasig-Tipton in recent years further illustrates the increase in buyer interest for horses that are race-ready, or close to it. The 2-year-old market remains the largest public auction source for horses who can be on the racetrack within months.

For this reason, along with the continued success of 2-year-old sales graduates on the racetrack, Brennan said the juvenile market stands to continue its run of good returns.

“A lot of people just like to buy yearlings, period,” Brennan said. “But as the success of the 2-year-old sales and its graduates continues, I think more and more people will have to consider the 2-year-old sales that haven’t in the past. Certainly, there is a premium on some of the horses that stand out at the 2-year-old sales, but we’ve removed all the risk factor. As a buyer, you get to see everything. Basically, we’re taking those rookies and putting them through boot camp for you, and you’re getting the end product.

“Obviously, they’re not going to overtake the yearling sales because the yearling sales have huge numbers in relation to the 2-year-old sales, but as long as the 2-year-old sales continue to be this successful and produce runners, I think they’ll continue to show good results financially.”

OBS MARCH SALE OF SELECTED 2-YEAR-OLDS IN TRAINING
When:
March 10-11, 11 a.m. Eastern
Where: OBS sales complex, 1701 SW 60th Ave., Ocala, Fla. 34474
Phone: (352) 237-2154
Catalog: 411 horses, up 19 percent from 345 last year
Recent history: The 2013 sale posted overall positive results while selling 185 horses for $28,794,000 (up 16 percent), an average price of $155,643 (up 13 percent), and a median price of $125,000 (up 25 percent). Stonestreet Stables bought a Smart Strike colt out of Mini Sermon, consigned by King’s Equine, agent, for $1.8 million to top the sale. Named Pacific, the colt is unraced.
Internet: Live streaming at www.obssales.com