11/23/2007 12:00AM

Perfect conditions for foreign buyers

EmailLEXINGTON, Ky. - The Keeneland November sale set a record for total receipts, and a highly significant part of the auction's success was the participation of buyers from other countries.

Geoffrey Russell, director of sales for Keeneland, said that a third of the business at the Keeneland September and November sales came from overseas, with buyers from 43 countries making purchases.

The participation of buyers from other countries was especially important this year because of the condition of the U.S. economy.

"I'm convinced that we would have had a significant market correction this year without the weakness of the dollar, which allowed more overseas buyers to enter the market and buy more horses," Russell said. "The domestic market is still two-thirds of our business, but the position of the dollar relative to other currencies had a powerful impact on buying endeavors from overseas."

As a result of the beneficial exchange rate this year, buyers from abroad were able to purchase breeding stock and racing prospects from America at a discount in their native currencies.

This factor was especially important to people becoming involved in Thoroughbred breeding or racing elsewhere, Russell said, because "in most of these countries, the leading breeders don't sell their best horses, but here we are in a commercial venture, and we buy and sell all the time."

The involvement of buyers from other countries did not happen on a whim, nor did it occur solely from a change in the dollar's value, but rather was a concerted effort by the Kentucky Thoroughbred Association and Keeneland.

"Several years ago Keeneland and the KTA came together in a program to promote the Kentucky Thoroughbred," Russell said. "We tend to identify countries that are involved in the Thoroughbred industry and getting larger and bigger. One of the areas we've concentrated on is South America, as well as countries in the Pacific region.

"We preach the gospel that Kentucky Thoroughbreds are the animals that race best internationally, and then we try to bring them here to buy horses to improve their racing and breeding."

Keeneland even has personnel devoted to the task of working with buyers from other countries. Chauncey Morris is the sales marketing associate for Keeneland who specializes in this.

"We target those countries that have a strong tradition of racing and breeding," Morris said, "and that have something happening within, either macroeconomically in their general economy or microeconomically within racing, that is taking them to a more advanced level of racing and breeding.

"The Argentines are an excellent example. There were two Argentine-breds who won on the Dubai World Cup card," emphasizing both the success and international importance of Argentine racehorses.

American breeders and racing fans immediately recognize the impact of Argentine bloodstock because of last year's Horse of the Year, Invasor. And many of the top Argentine and South American racehorses are resulting from crossing Kentucky stallions on quality South American broodmares.

Morris noted that commercial breeders "are getting together and bringing down very good stallions" as shuttle stallions. This is giving South American breeders and racehorse owners the opportunity to use international-quality sires.

"One of the Argentines' best young horses is a Group 1-winning daughter of Orientate," Morris said, "and their upward economics are due to increasing purses from slots."

These factors combined to produce an "increase of 100 percent or more in the volume of purchasing from Brazil, Australia, Argentina, Venezuela, and Italy," Morris said, "as well as other large increases, such as from Korea, rising by 50 percent."

As an example of the volume of international sales traffic, KOID, which is a Korean purchasing and shipping agent, signed for 29 mares in November.

"We sold 102 horses out of the November sale to Korean purchasers," Morris said. "They are putting more emphasis on breeding because the Korean Racing Association has put considerable money into purchasing high-profile stallions in Kentucky such as Exploit, Vicar, Volponi, Menifee, and Commendable."

One of the professionals involved in this export trade is Jun Park, a bloodstock agent and professional associate of David Lambert's Equine Analysis Systems. Park said that one reason for the increased buying from Korean breeders is that the Korean Racing Association, which purchases most of the high-profile stallions sent to Korea, "is requiring better mares to be bred to better stallions, and mares from Keeneland have better quality and offer better choices."

Park has used the quality of Keeneland's selection to his clients' advantage, with such purchases as Seungyu Sinhwa (pronounced Soong-you Shin-wa), one of the top racehorses in Korea and a son of Belmont Stakes winner Commendable.

"Seungyu Sinhwa was the first racehorse in Korea to break one minute for five furlongs," Park said. "People said he would be cheap speed, but he kept improving with distance, and the quality of races increases as the distance increases. Now he is winning at 10 and 12 furlongs."

Seungyu Sinhwa is expected to race next in the Grand Prix in the middle of December.

Park is not a mass marketer of horses overseas, preferring to pinpoint quality for his clients. Among the other important horses he has purchased is First Violin, the dam of Blue Grass Stakes winner Dominican.

With a broodmare population of 2,000 in Korea a year ago, buyers added about 5 percent to that total from their purchases at the Keeneland November sale. It would not be prudent to expect such continued purchasing at this level every year, however. Many buyers from abroad are highly sensitive to fluctuations in the exchange rate, and a higher quantity of purchases will, over time, diminish the need to import quite so many animals into some breeding programs.