06/23/2017 11:30AM

Still feast or famine in juvenile marketplace

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At the end of last year’s 2-year-old auction calendar, one could sense discontentment among the market’s consignors. Perhaps a change was coming.

Overall figures were steady, if not improving, but morale still seemed low when sellers discussed the overall marketplace. The word most frequently used to describe the market was “polarized,” the same as it had been for years, but the migration of buyers toward the marquee offerings and away from horses under the bar had become more accelerated than ever. Horses in the mid-to-lower tiers of the season’s later auctions were often moved for slim profits at best, just to get them off the books.

Part of surviving in a demanding marketplace is adapting to the twists and turns. Many pinhookers responded to a bare lower market in 2016 by buying yearlings that summer and fall with the hopes of staying out of the market the following season.

Pinhook buyers had a noticeable presence at the high-end Fasig-Tipton Saratoga select yearling sale and populated the buyer lines in the early books of the Keeneland September yearling sale more heavily than usual.

The results of the 2017 major juvenile auction season reflected that shift in philosophy. The chosen few at the top of the marketplace became a larger group, but the monetary returns, and the feeling of some consignors, showed that the polarized market was far from gone.

“It was a good season if you had what they wanted,” consignor Eddie Woods said. “It’s all very much top end. That’s where it all happens. After that, it’s a bit of a struggle.”

All seven of the juvenile auctions hosted by major North American sale companies – Ocala Breeders’ Sales Co., Fasig-Tipton, and Barretts – posted gains in average price, while six sales saw a lower buyback rate and an improved or unchanged median.

A total of 1,915 juveniles sold at the seven major 2-year-old sales, down 9 percent from 2,110 the previous year. That change was most apparent in the open sales that make up the second half of the season – the Fasig-Tipton Midlantic, Barretts May, and OBS June sales, which each saw fewer horses sold in 2017.

The OBS June sale in particular, the final sale of the season, cut its proceedings in half from four days to two. From a population standpoint, it was the sale hit hardest by pinhookers buying yearlings to stay out of the bottom of the market.

“I was lucky enough not to have any horses left for June, but at the [Fasig-Tipton Midlantic] sale, I had some lovely horses that I had trouble selling,” said consignor Cary Frommer. “Yet I was rewarded for the ones I stepped up on, so it was more of the same. It should make for a very robust yearling market for the top horses.”

While the number of horses sold was down, total revenue for the seven sales rose 11 percent to $192.3 million from $173.9 million. The average sale price of $100,451 marked a 22 percent increase from last year’s figure of $82,430.

The national buyback rate finished at 20 percent, down from 25 percent last year.

Not surprisingly, the biggest growth was seen at the top of the market. The number of seven-figure juveniles rose to 12 from eight.

The most expensive offering of the season was a Tiznow colt who sold to Coolmore's M.V. Magnier, via agent John Moynihan, for $2.45 million at the OBS spring sale.

The colt, out of the unplaced Distorted Humor mare Moonbow, was consigned by Bobby Dodd as agent and became the most expensive horse ever sold at an OBS auction. He was the highest-priced unraced juvenile sold in North America since 2007 and surpassed the previous OBS record of $1.9 million paid for the Tapit filly Inheritance by LNJ Foxwoods at the 2015 spring sale.

At the next level, the number of horses sold for $500,000 or more rose to 65 from 42, while horses sold for $250,000 or more increased to 207 from 172.

Numbers balanced out in the middle market, with total six-figure sales declining slightly to 520 from 524. Horses sold for $50,000 or more fell to 901 from 905.

The biggest improvements from individual auctions came largely from the most populous events. The OBS March sale, which has expanded its catalog in recent years, posted record returns in gross and average.

However, it was the OBS spring sale in April, the season’s longest at four days and 1,208 horses cataloged, that saw the most dramatic results, adding all-time-high gross, average, and median figures to its record-priced horse.

“I think there’s better horses coming to it every year,” Woods said about the OBS spring sale. “For a long time, it was just an everyday sale – a lot of horses and a lot of inexpensive horses. Now you can basically bring anything you want to OBS [spring] because people are there to give you the money for them, which is good. Everyone’s a bit more comfortable these days bringing their better horses to the April sale.”