11/23/2009 12:00AM

Sale results spark optimism for 2010


LEXINGTON, Ky. - The 2009 Keeneland November breeding stock sale is in the books. Despite losses in gross and average, many buyers and sellers, particularly those that sold in the auction's first week, said they were pleasantly surprised that the downturns weren't worse. And Keeneland's sale director, Geoffrey Russell, said Monday that the auction's shallower-than-expected losses are a sign the Thoroughbred market is recovering.

The 13-day November sale ended Sunday after selling 2,779 horses for $159,727,800, down 14 percent from last year's aggregate for 3,019 horses. The average price of $57,477 was down 6 percent. But the $20,000 median was unchanged from last year. In another positive sign, the buyback rate fell from 28 percent last year to 22 percent, although some consignors said they felt pressed to sell, even at a loss, this year at a time when credit is in far shorter supply, sale income is down, and the expense of breeding and raising a horse remained much the same as last season.

"We are a very resilient industry," Russell said. "I think people are becoming realistic. It is a new world, and people now have got their hands around it. Last year was just free-fall. Everybody felt 2009 would be the toughest year because of the expensive costs in these horses and the financial crisis. I think the industry has gotten through it very well. Report of mares bred is down, which is good, and stallion masters have been understanding of the market and reduced stud fees, which will help profitability when the resulting foals go to market. And if production costs are less, purchase prices will be more amenable to new buyers.

"I think 2010 will be a lot better than 2009."

The 2009 sale figures were aided substantially this year by the dispersal of the late W.T. Young's Overbrook Farm stock, which provided four of the auction's five millionaires. The sale-topper was Honest Pursuit, a $3.1 million racing or broodmare prospect that Alain Wertheimer of the Werthemier et Frere stable purchased. The 4-year-old Storm Cat filly is out of Grade 1 winner Honest Lady, a daughter of the legendary Grade 1 producer Toussaud.

The Eaton Sales agency handled Overbrook's dispersal, which grossed $31,760,000 for 148 horses, an average price of $214,595.

"The Overbrook dispersal, which sold on market forces and with no reserves, established a base for everybody else to appraise horses, whether they were buyers or consignors," Russell said. "Nobody had any confidence in the value of a horse, and now we have values of horses. You can use your own criteria to compare your mare to their mares at those prices."

Foreign buying also increased nearly 10 percent, Russell said. But only two of the five millionaire mares, Honest Pursuit and $2.25 million Azeri, went to foreign interests; Azeri sold to Katsumi Yoshida of Japan. That pointed to a wider, and largely unexpected, uptick in domestic buying activity.

"The level of domestic buying in mares surprised me," Russell said. "Going into it, we felt that the domestic market would be strong in foals and the international market would be strong in mares, which it was. But if you'd told me that our leading buyer would be an American, I wouldn't have thought so."

Edward Evans led all buyers by gross, with five purchases totaling $3,565,000. That included Overbrook's $1.3 million Dark Sky, a 4-year-old full sister to French Oaks winner Nebraska Tornado.

Terrazas relocating to Overbrook

Overbrook Farm property, meanwhile, has leased about 150 acres to Eduardo Terrazas's Terrazas Thoroughbreds. Terrazas, a former stallion manager at Overbrook and then Taylor Made Farms, announced Monday that he will relocate his breeding operation from Paris Pike on Lexington's north side to Overbrook, south of Lexington, on Dec. 1.

Terrazas established Terrazas Thoroughbreds four years ago as a breeding, boarding, and sales prep operation.

"My operation is smaller," Terrazas said. "It normally consists of about 35 year-round mares, and, like everybody, I also depend on seasonal mares boarding here. We average close to 60 head a month during the breeding season. I prep around 30 to 40 yearlings for the sales."

Among the mares that will be moving with Terrazas to the Overbrook property is Cappucino Bay, Medaglia d'Oro's dam. She is carrying a Street Sense foal, due in January, Terrazas said.

Terrazas said that he is keeping open the possibility of leasing more Overbrook land, if it is available, in the future.

"I just want to keep horses on that property for as long as I can," he said. "A lot of champions were in that place, and hopefully we can continue that."

Juddmonte cuts stud fees

Juddmonte Farms in Lexington is the latest stallion operation to lower its horses' stud fees for the upcoming 2010 breeding season. Empire Maker, sire of Grade 1 winner Pioneerof the Nile, will stand for $50,000, down from $100,000 this year. First Defence will drop in cost from $20,000 to $12,500; Mizzen Mast goes from $25,000 to $15,000; and Aptitude will stand for $7,500, down from this year's price of $10,000.

All fees are live foal, payable Nov. 1, 2010.

* Grade 3 winner and Sovereign Award contender Smart Surprise has retired from racing. Mating plans for the 5-year-old Smart Strike mare are pending, according to Hill 'n' Dale Farms owner John Sikura. Smart Surprise, a daughter of the Secretariat mare Weekend Surprise, is a half-sister to Grade 1 winner Court Vision and stakes winners Lord Snowdon and Garcia Marquez. She retires with 7 wins from 22 starts and $508,709 in earnings.