Juvenile Market Completes $200-Million Bounceback

It may still turn out that we're living under a volcano. For now, however, the first major bloodstock cycle after the trauma of 2020 represents an almost symmetrical, V-shaped recovery–right back to the $200-million breakthrough made by the American 2-year-old market in 2019. Despite restocking with a diminished pool of horses, compared with then, this sector has resembled a giant stress ball in retrieving all its former buoyancy the moment the squeeze was released.

It was the juvenile consignors, of course, that were first broadsided by the pandemic last year. Somehow they got through OBS March, though an air-raid siren might as well have welcomed every horse into the ring, before a dazing series of cancellations or postponements. From the catalogs that were salvaged, the ratio of scratchings approached two-in-five as alternative solutions were improvised with trusted clients, from private sales to racing partnerships. Those that persevered into the ring did so very much with a “fire sale” mentality: cut your losses, get your jabs, start over. The final reckoning, at public auction, obviously didn't represent the full picture but offered a vivid measure of the pain: aggregate turnover collapsed by 38% from $203,206,700 to $125,956,800 and average transactions by 24.4% from $95,807 to $72,388.

A $200-million juvenile market in 2019, remember, had represented a fresh landmark in a breathless bull run for the whole bloodstock industry. Some of us then responded with wiseguy finger-wagging: since perennial growth had historically proved impossible, capitalism instead depended on cyclical correction of overheated markets. But just as nobody could have predicted this particular needle, nor could anyone confidently assert that a new balloon might be inflated virtually overnight.

But that is just what has happened. With obliging neatness, the 2021 2-year-old market–rounded off at Santa Anita last week–has rebounded 59.4% on last year's crash landing, to $200,782,050. The average, similarly, recovered by 28.2% to $92,826. Removing the freak 2020 market from comparisons yields a remarkably solid match-up with the giddy trade of 2019, turnover falling short by just 1.2% and average by 3.1%.

Unsurprisingly, consignment was somewhat leaner this time round. Pinhookers had tightened their belts, while yearling vendors were no doubt less ambitious with their reserves (being less inclined simply to retain a horse and try again next spring). Nor should we forget an ongoing decline in the available pool, the North American foal crop having subsided from 35,000 to around 20,000 since the previous economic shock of 2008. That narrower base has improved the solidity of this market. The RNA rate at juvenile sales in 2007 was around one-in-three, and has in recent years consistently been one-in-four or better.

Indeed, the clearance rate is the more spectacular of all the indices of recovery in 2021, with no fewer than 83% of animals into the ring finding a new home, up from 77.4% in the booming (and bigger) 2019 market. In other words, the symmetry of this 'V' rally can be pretty well ascribed to pure demand. And perhaps that's no surprise, given the forecasting consensus. Yes, the pandemic has been catastrophic for many businesses. On the other hand, those whose affluence is unimpaired find themselves straining with pent-up spending capacity.

For around a decade, leading up to the pandemic, the entire international bloodstock market had been nourished by the fiscal response to the 2008 crisis, with quantitative easing and marginal interest rates fostering liquidity. Then came the tax breaks lavished upon the wealthiest during the last presidency. Throw into the mix a universal suppression of indulgence over the past 15 months–everyone, after all, has been freshly reminded that life is for living–and you have a perfect recipe for a renewal of demand for luxury goods. (And that, as we who view them as a vehicle of subsistence are apt to forget, is precisely what the Thoroughbred racehorse is.)

Some commentators on the wider economy admittedly consider this too fragile a foundation for sustainable recovery. Their fear is that the distribution of wealth, which has not been so unbalanced for a century, leaves too many people unable to contribute to the consumption that drives the economy. If that is so, the stakes are plainly high for the various stimulus programs.

Indeed, those instead predicting a 'K'-shaped recovery see many of the ingredients that fed the Great Depression back in place, with spending power only able to meet production capacity by personal debt. Marriner S. Eccles, chairman of the Federal Reserve under Roosevelt, famously compared the Depression to “a poker game where the chips were concentrated in fewer and fewer hands, [and] other fellows could only stay in the game by borrowing… When their credit ran out, the game stopped.”

So while the resilience of this particular market is a massive relief for many professional horsemen, making a modest living by their skill and sheer hard work, you can bet that some analysts are lining it alongside prices for art and sportscars and sensing trouble ahead.

Be that as it may, for now we can be extremely grateful for such an enthusiastic resumption of investment in our industry. As a result, many a humble household is back on its feet. The juvenile sector, after all, is perhaps the one that trims its sails most bravely into the weather. It tries to eke out extra value from an adolescent Thoroughbred that may already have been through the ring twice, as weanling and yearling–with no backstop, no Plan B. A very strong yearling market, moreover, simply elevates the base costs and places a daunting premium on firing a “bullet” at the under-tack show.

So we're looking at horsemen of unusual flair and endurance. Volatility is embedded in their program. We all read the “home run” headlines, but each of those must repair the damage made by the duds. A market that fluctuates so wildly, then, only adds to a routine precariousness.

Let's take a snapshot of the middle market, where so many pinhookers operate, via the median at Keeneland September–and compare that with the average juvenile dividend.

 

Obviously we're not comparing like with like, but we can see that even at the best of times consignors find themselves either stranded on the beach or catching a rising tide, with very little middle ground. The pinhooker who had operated in the middle market at Keeneland in 2019, with a $47,000 median, last spring sold into a market averaging $72,388. That didn't leave a lot to work with, once the intervening bills had all been paid.

Conversely, they could restock much less expensively–the Keeneland median down to $37,000–and this time round a $92,286 average will have allowed many to patch up some of the holes in the roof.

But they're a hardy crew, for sure. Albeit this is a fairly eccentric gauge of their work, in percentage terms the 2019-2020 cycle, brutal as it was, was little different from those of 2013-14 and 2015-16. What a way to make a living!

As for those stallions who best served their cause, I always consider the table of juvenile averages misleading. Many stallions are represented by so small a sample at the 2-year-old auctions that a single knockout price can conceal a multitude of deficiencies; while often even the highest averages fail to match the same crop's performance at the yearling sales. Let's take a look at the top 20 sires (minimum four 2-year-olds sold) by average–but let's also compare those yields with their averages/medians with the same crop at the yearling sales.

We see that even class leader Quality Road, with a $1.5-million colt to boost his average, actually had an unchanged median. Runner-up Uncle Mo, similarly aided by a $1.3-million sale, made a presentable advance by average but his median was down by half. And third-placed Nyquist, who made impressive gains by average, made only a modest advance with his median.

In fairness, the remarks about a small sample cut both ways. The median, from so limited a group, is perhaps not that instructive. Nonetheless hats off to Flatter, Liam's Map, Maclean's Music, Twirling Candy and Frosted for doubling (or better) their medians in passing stock through 2-year-old consignors. Practical Joke's fine debut in this sector is also clearly legible, whether by average or median. But one or two of the bigger hitters missed their mark this time, for once even champ Into Mischief. His rise had been very well measured by this sector, but in 2021 he rehoused only 21 of 35 juveniles, with his average and median both receding. A rare blip, and if a whole market can bounce back from one dull year, so can the stallion of the decade.

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Rubber Match for ‘Liam,’ ‘Spending’ in Manhattan

At the conclusion of the May 1 GI Old Forestor Bourbon Turf Classic at Churchill Downs there was no room to spare between Robert and Lawana Low's Colonel Liam (Liam's Map) and Klaravich Stables' Domestic Spending (Kingman {GB}) who crossed the wire in unison and the duo will attempt to separate themselves in Saturday's GI Resorts World Casino Manhattan S. at Belmont. Domestic Spending is trained by Chad Brown, who has won the 1 1/2-mile race on seven occasions, including the last two most recent renewals.

On the board in all five starts at three, including a win on the Saratoga Derby Invitational, Domestic Spending rounded out the year with a score in the GI Hollywood Derby at Del Mar in November. Given some time off, he returned to dead heat with Colonel Liam last time.

“He seems to be doing really well and came out of his last race super,” Brown said of the colt, who will break from post 4 with Flavien Prat back in the irons. “He's been breezing like a timepiece, so I think we're in good shape. He ran a faster race than the horse he dead-heated with in the Turf Classic. We're confident he'll run a good race.”

Brown also saddles Group 2 winner Master Piece (Chi) (Mastercraftsman {Ire}), MGISP Rockemperor (Ire) (Holy Roman Emperor {Ire}) and Tribhuvan (Fr) (Toronado {Ire}), winner of the May 1 GII Fort Marcy S.

Trying to take down Team Brown, Colonel Liam, who finished fourth behind Domestic Spending in last summer's Saratoga Derby, kicked off his winning skein in December with a confident victory in Gulfstream's Tropical Park Derby before eking out a win in the 9 1/2-furlong GI Pegasus World Cup Turf Invitational at that venue in January. Prior to his Turf Classic tie, he proved best in the GII Muniz Memorial Classic S. Fair Grounds in March.

“It's a very deep race and a very good race, arguably the strongest on the card,” said trainer Todd Pletcher of the Manhattan. “Colonel Liam is doing great and he's run well every time; we expect him to do the same again.”

He added, “I think he thought he had [the Turf Classic] won last time and he may have idled a touch when he got to the lead. Depending on the pace scenario, I don't see too much pace. He may find himself closer and possibly on the lead. We'll play it by ear and let him do his thing.”

Ridden by Irad Ortiz, Jr., the grey will break from Post 10.

Calumet Farm's Channel Cat (English Channel) comes into this off a career-high score in Belmont's GI Man O' War S. May 8. The 6-year-old was able to withstand the oncoming 2020 GI Belmont Derby winner Gufo (Declaration of War) by a nose at the wire.

“I'm only just getting to know the horse, but he seems to really be coming around in the short time I've had him,” said Jack Sisterson, who took over Channel Cat's training in late 2020. “He was second in the [GII] Elkhorn [S. at Keeneland Apr. 17] and we wanted to give him time to come back for the Manhattan, but he put on 50 pounds after the Elkhorn and his coat was coming around. If horses could talk, he was telling us he wanted to run again. So, we ran him back quick.”

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Crazy Beautiful Finds Kentucky Oaks Redemption In Summertime Oaks At Santa Anita

Kentucky-based Crazy Beautiful made amends for a disappointing effort in the Grade 1 Kentucky Oaks as she rallied three-wide turning for home en route to a 1 ¾-length win in Sunday's G2, $200,000 Summertime Oaks at Santa Anita in Arcadia, Calif.  Trained by Ken McPeek, ridden by Mike Smith and saddled today by locally based trainer Karen Headley, Crazy Beautiful got 1 1/16 miles in 1:43.85.

Last after the first half mile, about three lengths off speedy Lady Aces, Smith saved ground at the rail around the far turn and allowed his filly to idle a bit as longshot Plum Sexy, to his immediate outside, began to tire.  Approaching the quarter pole, Smith then angled out to tackle both Lady Aces and heavily favored Soothsay, who was all-out at that point to make the lead while Crazy Beautiful didn't gain the advantage until deep stretch.

“She broke really well, I noticed in the Kentucky Oaks (on April 30), she got slammed leaving there, never really giving her the chance to run,” said Smith, who was aboard Crazy Beautiful for the first time today.  “So, I knew (with) a better break and the way she's bred with Liam's Map (and an) Indian Charlie mare, she has some speed if you needed it.

“For a minute there I thought about going to the lead, but they went up there and entertained themselves enough to where I felt confident (about taking off the early pace).  With a short field, I was hoping Plum Sexy would drop back and I'd get out when it was time.”

A winner of the G2 Gulfstream Park Oaks two starts back on March 27, but 10th, beaten 10 ½ lengths in the G1 Kentucky Oaks April 30, Crazy Beautiful was the second choice in a field of four sophomore fillies at 6-5 and paid $4.60 and $2.10 with no show wagering.

A Kentucky-bred filly by Liam's Map out of the Indian Charlie mare Indian Burn, Crazy Beautiful is owned by Phoenix Thoroughbred III.  In notching her second graded stakes win, she improved her overall mark to 9-4-3-0 and with the winner's share of $120,000, increased her earnings to $520,865.

“She didn't get here to my barn until eight or nine Thursday night, so we just walked her Friday morning,” said Headley.  “Mike came out and galloped her Saturday, so I really didn't do much with her at all.”

A winner of her first two starts including the G2 Santa Anita Oaks on April 3, Soothsay sat second, just off of Lady Aces to the top of the lane and then was all-out to finally overhaul her with a sixteenth of a mile to run, at which point the winner blew by both of them.

Trained by Richard Mandella and ridden by Flavien Prat, Soothsay was off at 4-5 and paid $2.10 to win while finishing 1 ¾ lengths in front of a gallant Lady Aces and Umberto Rispoli.

Fractions on the race were 23.66, 48.36, 1:12.84 and 1:37.42.

First post time for special holiday racing on Memorial Day, Monday is at 1 p.m. Three G1 stakes, the Hollywood Gold Cup, the Shoemaker Mile and the Gamely will highlight a nine-race program.  For additional information, please visit santaanita.com or call (626) 574-RACE.

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Summertime Oaks: McPeek Hoping For Cleaner Trip For Crazy Beautiful

Kenny McPeek, who captured the 2020 Santa Anita Oaks with that year's Eclipse Award champion 3-year-old filly Swiss Skydiver, seeks another Oaks victory at Santa Anita in Arcadia, Calif., on Sunday in the Grade 2 Summertime Oaks with Crazy Beautiful, who, like Swiss Skydiver, will be ridden by Mike Smith.

Crazy Beautiful, a gray daughter of Liam's Map, is coming off a disappointing but eventful 10th-place finish against 12 rivals in the G1 Kentucky Oaks on April 30, when she was seriously impeded at the start.

“It was a pretty good case of bumper cars,” McPeek said by phone from Churchill Downs. “She got kind of mangled leaving there and again in the middle of the race. It seemed like nothing went right.

“Obviously, there will be a lot less traffic on Sunday (with five horses going 1 1/16 miles) than her last race. She's a classy filly who's already won a Grade 2 (the Gulfstream Park Oaks on March 27, prior to the Kentucky Oaks), so we felt like this was a good spot for her. We're excited to hopefully getting her back to her winning ways.”

With McPeek busy back east with the likes of Swiss Skydiver, who runs in the G1 Ogden Phipps at Belmont Park on June 5, Crazy Beautiful is being cared for at Santa Anita by trainer Karen Headley.

“Bruce (Karen's late father) and Karen are longtime friends,” McPeek said. “I've shipped into their barns for years. She'll saddle her and handle all the details.”

Bruce Headley was a charismatic and colorful trainer whose most accomplished runner was Kona Gold, Eclipse Award champion sprinter of 2000. He set a six-furlong track record of 1:07.77 that year winning the Breeders' Cup Sprint at Churchill Downs.

“The old man was a great guy,” McPeek said. “I always had a lot of respect for him as a horseperson.”

The Summertime Oaks is race eight of nine with a 1 p.m. first post time: Lady Aces, Umberto Rispoli, 4-1; Crazy Beautiful, Mike Smith, 6-5; $4,000 supplemental entry Plum Sexy, Abel Cedillo, 20-1; Soothsay, Flavien Prat, 4-5; and Absolute Scenes, Trevor McCarthy, 50-1.

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