What a strange bloodstock marketplace we find ourselves in.
Baseline returns have perhaps never been higher at auction, and the number of mares bred and foals on the ground are at decades-long lows. The top of the marketplace is dominated by a shrinking handful of elite principals and partnerships, whether we're talking about buyers or stallion operations, and the number of active stallions has declined while average book sizes rise.
More money seems to be getting spent by a smaller group of people, and on balance, most everyone seems pretty alright with it.
Working off that general model of the industry, here are my five predictions for how the bloodstock market will play out in 2023. If you want to take a look at my predictions for 2022 and see how I did (some hits, some misses), click here.
1) Into Mischief Will Repeat As Leading General Sire Again…But Someone's Nipping At His Heels
Into Mischief just keeps topping the general sire list and setting records, and as his books of mares continue to be top-shelf. That's not going to change anytime soon. He's got big crops, and the attention of every major buyer, breeder, owner, and trainer is squarely on Spendthrift Farm's ace. He should breeze to his fifth consecutive general sire title in 2023.
With that being said, the greatest threat to Into Mischief's throne has made himself known over the past couple years, and once he gets some more crops to the races, we're going to have to have some tough conversations.
With just one crop of racing age available to race from January to December, along with a class of 2-year-olds bringing up the cavalry charge, Gun Runner finished fifth on the general sire list by earnings.
Gun Runner will have to prove that he can do just as much with his second and third crops as he did with his debut group of foals. Few modern sires are immune to a dip in quality and quantity of mares in their follow-up books after commercial breeders move on to the next new thing, but Gun Runner has hit it so far out of the park to date that I don't expect it to be an issue. Even if his numbers do sag a bit, he'll be set for life once the top-flight mares he's seen over the past couple years – and that he'll likely see for years to come – start entering the chat with foals and runners.
The battle for supremacy between Into Mischief and Gun Runner might still need a few years before it becomes a truly even match, but I wouldn't be surprised if the insurgent at least teases giving the incumbent a run for his money in 2023.
2) The Projected North American Foal Crop Will Continue To Decline
The North American foal crop surely has to rebound at some point, but if record sales figures in 2021 weren't enough to get people out and breeding more mares, I don't know what will.
As I mentioned in the introduction, the direction of the commercial bloodstock market has been trending toward contraction and consolidation for a long time, and the market has zero patience for anything non-commercial. Many state-bred programs are toiling to retain mares to send to their stallions, as well. Of the top 10 states by mares bred in 2022, eight of them posted declines.
The Jockey Club projects the foal crop of 2023 will be 18,500 strong, which is down about 200 from the projected 2022 crop. We haven't seen numbers that low since the mid-1960s.
I don't expect a drastic dip in mares bred for 2023, or in projected foals for 2024, but I also don't see any good reason why we haven't found the bottom of the contraction of commercial breeding. I see the projected foal crop shaving off another 100 or 200 members in 2024, based on mares bred during the upcoming season. I'd love to be wrong on this one.
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If you appreciate our work, you can support us by subscribing to our Patreon stream. Learn more.3) Omaha Beach Will Be The Leading Freshman Sire
As we've discussed in the past, current commercial trends dictate that a top-five North American freshman sire must have covered at least 100 mares during his inaugural book. The number of foals they actually put on the ground is a different matter, but the “breeder intent” key must be turned for a freshman sire to succeed on a greater scope.
With that in mind, the following stallions are eligible to be leading freshman sire of 2023: Audible, Catalina Cruiser, Catholic Boy, Demarchelier, Enticed, Flameaway, Mitole, Maximus Mischief, Omaha Beach, Preservationist, Solomini, St Patrick's Day, Vino Rosso, World of Trouble, and Yoshida.
Okay, so that's a lot of them. Why does Omaha Beach stand out? It's part numbers game, part owner/breeder intent, and part racetrack performance, both real and projected.
First off, Omaha Beach bred a ton of mares. The Jockey Club reports he got 148 live foals, which trails only Spendthrift stablemates Vino Rosso and Mitole and WinStar Farm's Audible in his class. The freshman sire with the most starters has won the title by earnings only twice since 2016 (American Pharoah in 2019 and Violence in 2017), but the top dog still was among the leaders by foals on the ground. Check that box.
Omaha Beach was among the highest-priced stallions of his freshman class, which is usually a good indicator that breeders weren't going to send cheap mares to him. Breeder intent? Check.
As for owner intent, one only needs to look at the names on tickets that bought the Omaha Beaches during last year's yearling sales: Repole Stable and St. Elias Stables, Peter Brant, Starlight Racing, Mike Ryan, Joel Politi, and of course, Spendthrift Farm. These horses are going to be put in the top barns and given opportunities to race at top meets, earn big maiden purses, and run in graded stakes races.
The runners have to live up to those expectations on the track, but the horses will be led to water. I think they'll drink
4) Tapwrit Will Right The Ship
Every year, it seems as though there is one freshman sire that severely underperforms during their rookie season, then wakes up in a big way once their oldest runners turn three.
Arrogate rebounded from a finish outside the top 10 in 2021 to have last year's Kentucky Oaks winner, Secret Oath. A year before that, Runhappy struggled during his freshman season, only to turn things around in a big way in the seasons that followed.
Of the candidates of last year's freshman sire class, Tapwrit is both the biggest head-scratcher as to how he ended up here, and the one with the biggest ceiling to improve.
Tapwrit finished 21st on the freshman sire list by earnings, even though he had more winners than one of the top-10 freshman sires, and an average progeny winning distance that moves him much further up the list.
There are already signs that things might be pointing up for Tapwrit. The undefeated Victory Formation struck his claim as an early Kentucky Derby contender with an impressive victory in the Smarty Jones Stakes at Oaklawn Park on Jan. 1.
Tapwrit's 2-year-olds posted an average winning distance of 6.31 furlongs, which is in the neighborhood of the class's top trio, Bolt d'Oro, Good Magic, and Justify. Tapwrit himself only ran one race shorter than a mile, and it was his debut. He proved himself to get better with both age and distance, and I think people bred to that aspect when Tapwrit went to stud. As his 3-year-olds start getting more opportunities to go around two turns, and the precocious types by other sires start falling back to the mean, I expect Tapwrit will find his sea legs.
Will Tapwrit suddenly make up all the ground and contend for the top spot of his sire class? That's probably going to be too much to ask. Can he prove he's more than what the demands of the freshman sire marketplace put on him and his runners in 2022? I think so.
5) Growth Will Continue In The Auction Market
Every year, I predict that the market will cool off from the new, dizzying heights it just achieved and find a nice cruising altitude, and the only time I've been right about it in recent memory was because a pandemic had brought the gears of commerce to a screeching halt.
With that in mind, I'm just letting the tide sweep me away on this one. Purses are up, people with wealth are spending more money (or partnering up with other rich people to spend even more money), and stud fees continue to float up as breeders pile in to fewer and fewer stallions. I've given up trying to understand why it's happening, but I suppose it's better than the alternative. Let the good times roll.
The post Making Claims: Joe Nevills’ Five Fearless Predictions For The Bloodstock Market In 2023 appeared first on Horse Racing News | Paulick Report.
