09/06/2007 11:00PM

Yearling profits have key factor: Balancing books

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Beginning Monday, the Keeneland Association will sell approximately five times as many yearlings as were sold at the August Ocala Breeders' Sales auction. The numbers were positive at the Ocala auction. The average price for the 1,319 yearlings sold in the five combined selected and open sessions rose a fraction to $19,817, while the median was up 5.8 percent, to $9,500.

On the surface, it would appear that the yearling market is a money-making venue. But appearances can be deceiving. There are generally two classes of breeders: those who own or lease their properties and do the work themselves, and those who board their stock. In Florida it requires an investment of approximately $20,000 to breed, raise, and sell a yearling at an established sale, and this does not consider the mare's contribution or the stud fee. Generally, then, given the $19,817 average at the latest OBS sale, most Florida breeders theoretically lose money breeding yearlings.

Stallion fees can make the difference between profit and loss. Young sires get hot, and breeders get a boost at the next sale. Some freshman stallions are the beneficiaries of a buzz, which also translates into higher returns at the sales.

Among those Florida stallions with first crops at the OBS yearling sales who had a buzz were Hartley-DeRenzo Walmac South's duo of City Place ($4,000 fee) and Omega Code ($7,500); Spanish Steps ($10,000), who stands at Martin Stables South; and, at the Vinery, Peace Rules ($15,000). Three sires boosted by having one or more crops at the races were Macho Uno ($12,500 at Adena Springs South), Put It Back ($5,000 at Bridlewood Farm), and Trippi ($10,000 at Ocala Stud).

All the stallions in these groups generated, on average, a profit for breeders. One in particular, Spanish Steps, did very well. With his 2005 fee at $5,000, Spanish Steps, a 6-year-old full brother to Unbridled's Song, had 19 yearlings sell for an average price of $42,774. These numbers include the second-highest price at the sale, a colt out of Poquito Polly, by Ogygian, who sold for $200,000 to pinhooker Nick de Meric.

"I was so pleased with the way Spanish Steps was received at the sales," said Eddie Martin of Martin Stables South, the renamed Marablue Farm, originally developed by Doug Henderson. Martin, as a consignor to the Ocala sales, sold 17 of the 19 offspring of Spanish Steps.

When Martin put Spanish Steps in stud in 2005, he knew that he had a tough row to hoe. Though the horse was a full brother to Unbridled's Song, he was unraced, and many an unraced full brother to a successful sire has gone begging for mares.

"I went out and bought mares, averaging about $50,000 per," said Martin.

The first year at stud for Spanish Steps, Martin was able to attract an additional 61 mares, complementing the 40 he bred. The following year, Martin again booked 40 of his own mares and got 49 more. This year, based on the $58,000 average of his weanlings at last year's sales, he doubled the stallion's fee to $10,000 and got 35 outside mares to go with his 40.

What especially pleases Martin are the reputations of those buying Spanish Step's yearlings.

"These horses are going into the hands of good horsemen and women," he said. "And this is so important when you have a young stallion that you are trying to make."

When asked what he attributes the successful response of breeders and buyers to his unraced stallion. Martin replied, "Well, he did not race, so that leaves two other factors. First of all, Spanish Steps has the pedigree to be a sire, and this is important to breeders and buyers, and second, he has the looks. More important, his yearlings have what buyers are looking for."