First sales send mixed messages

LEXINGTON, Ky. - The first two boutique juvenile sales are in the books, and consignors say the market is telling them to look for base hits instead of home runs when they take horses to the auction ring.

It's hard to develop a clear picture of the overall juvenile economy from the season-opening Ocala Breeders' Sales Company's February and Fasig-Tipton Calder sales. Each sold fewer than 100 horses, and their results sent mixed messages. The OBS February sale sold 66 horses for an 8 percent decrease in average and 27 percent decrease in median. Fasig-Tipton, by contrast, sold 91 juveniles and posted a 9 percent increase in average and a 33 percent increase in median.

But the two sales shared some trends, most notably a lot of presale viewing by buyers who generally are active in the 2-year-old market and higher prices compared to last year at the very top of the market. OBS sold three horses for $400,000 or more, easily outpacing last season's sale-topping price of $340,000 for Belle of the Hall, a West Point Thoroughbreds purchase. And this year's Calder sale-topper, a $2.3 million Distorted Humor-Tomisue's Delight colt Jess Jackson bought, was well up from the Calder sale's $1.6 million top price in 2009 for Al Zir. In fact, the $2.3 million Distorted Humor sold better than any juvenile did at auction in all of 2009.

Calder's $2.3 million colt was a home run for sellers Stacy Yagoda and Jill Julian, who paid $200,000 for him. There were other big scores among the $500,000-and-up Calder horses, but quite a few had cost more than $100,000 as yearlings - a risk many pinhookers say they're less likely to take now that the 2-year-old resale climate is even more selective. That risk doesn't always pay, as with a Silver Train-Annacious colt that brought $100,000 as a yearling and sold for the same amount at Calder.

Were the OBS February and Fasig-Tipton Calder sales too small to be bellwethers for the rest of the season? Sale officials and consignors differ on that question, but many yearling-to-juvenile resellers say they already detect a trend: Survival, rather than big profits, is the name of the game in today's highly selective

2-year-old market.

"We've done okay so far," consignor Ciaran Dunne of Wavertree Stables said. "We didn't make any thunder, but we're moving horses along, making a little profit here and there, and keeping our heads above water. We haven't unleashed a big horse on the market yet, and both of those first two sales were about big horses. . . . The top 50 or so horses that sold at Fasig-Tipton, only six of those had cost less than $100,000 as yearlings.

"I'm not sure we've seen a lot of change since last year, and those first two sales aren't necessarily representative of the whole market," he said. "What we've seen so far is polarization at the top, which hopefully will change at OBS March and its larger catalog. Hopefully, there we'll see the rebirth of that $50,000 to $200,000 market, which seems to have been nonexistent to this point."

The OBS March sale in Ocala, Fla., on March 16-17 has a 340-horse catalog.

"We've already seen the correction that's happening," Dunne said of his fellow juvenile consignors. "For the last two or three years, we've gotten used to the fact that we sell one out of three that we catalog. But the ones we sell will sell well."

"I'd say we've turned a corner but also polarized," consignor Barry Eisaman of Eisaman Equine said of the market so far. "I worry about the big disparity between number cataloged versus number actually sold."

One key to survival in an increasingly select juvenile market, these resellers say, is to reduce spending on the front end when you buy yearlings - but without reducing quality.

"We've never been of the variety to be lured into the temptation of buying a $200,000 or $400,000 yearling with the hopes he'll be a $1 million 2-year-old," Eisaman said. "You can hit with one, but you might also have four or five others like that that don't get sold."

Pinhooker Nick de Meric said the average amount he spent on yearlings in 2009 dropped by about 20 percent, "but we tried not to compromise in any way on the physical criteria we set for buying horses and maybe go after slightly lesser pedigrees that were a little more affordable.

"I don't feel that we sacrificed quality at all," he said. "And it was helpful that we were buying yearlings in a slightly softer market last year."

The result at the juvenile sales so far?

"We're staying alive," de Meric said. "We've had a few bright spots and a few base hits and not too many disasters yet. Hopefully, we can keep the ball rolling."