Almost 30 Million Guineas Spent On Foals At Tatts But Figures Take A Dip 

Tattersalls chairman Edmond Mahony acknowledged the weakness of the lower end of the market as the Tattersalls December Foal Sale concluded on Saturday with a 125,000gns Showcasing (GB) filly leading the way. 

Almost 30 million gns was spent on foals this week at Tattersalls while Friday saw the most expensive foal sold so far this year–a St Mark's Basilica (Fr) filly–in Europe and North America at 575,000gns.

However, the aggregate of 29,842,902gns was down 15% on last year while the average dropped 6% to 44,608gns. The clearance rate was more or less the same, dropping 1% to 75%, while the median dropped 19% to 21,000gns.

Mahony commented, “Sustained demand for quality foals has been the feature of the four days of selling at Europe's premier foal sale. In addition to the highest price for a foal in Europe and North America this year there have been a record 29 foals sold for 200,000 guineas or more and a healthy diversity of buyers in all sectors of the market.

“The cream of the British and Irish foal crop has attracted buyers in abundance not only from Britain and Ireland but also from throughout Europe and the Gulf region as well as China, Japan and America. The overseas demand has had a significant impact on trade which, although not matching last year's record levels, has remained robust with the exception of the lower end of the market which we must all recognise has been challenging.”

He added, “The pinhookers will always be the backbone of any Tattersalls December Foal Sale and as ever they have worked tirelessly, but the contribution from so many significant owners is becoming an increasingly important and regular feature of the sale. When a sale consistently produces racehorses the calibre of 2000 Guineas winner Chaldean (GB) and the unbeaten Group 1- and 2-winning two-year-olds Vandeek (GB) and Ghostwriter (Ire), it reflects the quality of the stock presented by the consignors and it is clear that their confidence in the sale has been reciprocated by many of the world's most successful racehorse owners.

“Another positive to come out of this year's December Foal Sale has been the overwhelmingly favourable response to the break in selling on the Thursday of the sale which allowed buyers valuable extra time to view the Friday and Saturday foals. The change was introduced in response to feedback from vendors and purchasers alike and as well as being well received it is notable that the clearance rates for both Friday and Saturday have improved significantly on last year's record-breaking sale.

“With a solid Tattersalls December Foal Sale behind us we now look forward to welcoming buyers from every continent in the world to Park Paddocks for another quality renewal of the Tattersalls December Sale which features some spectacular fillies and broodmares, many of them showcased in the elite Sceptre Sessions which take place on Monday and Tuesday.”

The Saturday topper (lot 1203) was consigned by Daymark Stud and went the way of Ciaran 'Flash' Conroy. The Showcasing filly is a sister to the stakes-placed Fourth Way (Ire) (Iffraaj {GB}) and will be offered for resale next year. 

Conroy commented, “Let's hope she is a top lot next year! She is a lovely physical, I like the stallion – he is a very good sire of fillies. She is a really good individual, very balanced, a very good walker. She is a Book 1 individual, and from a young operation so good to see young breeders having a good result.”

The sale capped off a solid day's trade for Daymark Stud with four foals selling for 263,000gns. 

“It is a sigh of relief! It has been incredible, we are very lucky, we are a very small operation,” the stud's Josh Cameron said. “I have done every hand walk with every single foal and some days I think 'Oh maybe I should get someone to help', but I do think it helps the foals in the end. I am not sure my girlfriend has loved living with me over the last eight weeks!

“But we got there in the end and thanks to the little syndicate who own the mare Messalina for their support. Two mates bought her out of Archie Watson's yard and sent her to me, and just said, 'See how you get on!' Her first foal by Havana Grey (GB), who we sold here last year for 46,000 guineas, is going to Kevin Philippart De Foy and this year she has produced this amazing Showcasing filly, who has not missed a beat all week. She is a real athlete and for someone like Flash to buy her is unreal.”

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This Side Up: A Gift That Keeps On Giving

Hang on a minute. Weren't the seven fat years supposed to be followed by seven lean years? The way the market has gone in 2021, we have barely had seven lean minutes. Nothing, certainly, approaching the kind of reset required, logically and historically, for the cyclical functioning of capitalism.

The prospect of some such “correction” had been the only latent comfort, cold as it was, for a bloodstock market confronted by the global economic shock of the pandemic. Because a decade of almost relentless growth wasn't even ending due to any inherent weakness of the industry: we were just being broadsided, out of nowhere, by something that nobody could ever have factored into their calculations. (Not, at any rate, without Pharoah summoning Joseph from the dungeon). If we took our medicine, at least we knew that the graph now had more space to accommodate a fresh spike in the profit line.

In the event, the market barely wobbled. There were some terrifying days for the 2-year-old sector, admittedly, while clearance rates often suggested a nervous pragmatism, notably in the European market. But overall demand on both sides of the Atlantic proved far more resilient than anticipated. And we have all seen-with due relief, among those who had felt trapped by the slow cycles of our business-how values have come roaring back in 2021.

On the face of it, then, some will be wondering whether we should also renew their anxiety that the market, at some point, remains bound to overheat? The long bull run up to 2020, after all, had been driven by fiscal responses to the last emergency in 2008: continuous doping of the economy with cash, via low interest rates and quantitative easing. This recovery already has a very different feel. It must negotiate rising inflation and fractured supply chains, while the panic of stock markets Friday betrayed an ongoing instability.

Well, whatever happens, our own particular niche of the economy should not overlook a “correction” that did actually take place, this time last year. At that point, even volatility felt like a remote prospect. Everything was stuck. Whether on moral or business grounds–or both, which should perhaps always be the case for capitalism to operate healthily–many stud farms felt obliged to show breeders that they were “all in this together” and took a scythe to their fees.

Nor were they just talking a good game. Sure, even at the best of times they will always trim a few stallions that need a little help. But this time the top dozen Bluegrass farms collectively cut sires with their first foals due, for instance, by 16.2%. In 2020, they had eased the preceding intake by just 0.5%. Stallions about to present their first yearlings were slashed by 19.9%, compared with 8.33% for their predecessors in 2020. And those launching their first juveniles came down fully 22.8%, again more than double the 10.2% squeeze on the equivalent group the previous year. Moreover many senior, proven stallions–who should really have been at a premium, as a relatively safe harbor in turbulent times–also took generous cuts.

Now that the boom times seem to have returned so quickly, however, it is hardly as though stud accountants can turn round to breeders and say: “Well, thank goodness the storm seems to be abating. We do hope you guys will remember how we stood by y'all in an hour of need. But you will understand that we must now restore our prices to the levels we felt competitive, and mutually viable, before last year.”

Instead they have obliged breeders with the kind of selective cuts customary in a normal trading environment–only this time, of course, from a much lower base. And that has to mean one of two things. Either stallion fees were way too high, up until last year; or they are now pitched at such a level, in a humming market, that breeders have a pretty historic opportunity.

Take Omaha Beach, who looked very fairly priced when retiring to Spendthrift at $45,000 and duly welcomed 215 mares in 2020. The one and only reason to cut him to $35,000 for 2021 was that the late B. Wayne Hughes–leading the way, as so often, and promptly emulated by most rival farms–had responded to the crisis by reducing 15 of the farm's 21 stallions. Remember that when Bolt d'Oro had similarly started with 214 mares, in 2019, Spendthrift had left his 2020 fee unchanged.

Omaha Beach promptly replicated his debut book precisely, with another 215 covers, and has made a spectacular debut at the sales, dominating the freshmen weanling averages at $144,692. Nonetheless the Spendthrift team, respectful of the Hughes legacy, have indulged clients by giving him an extra trim to $30,000. This is the type of gesture often made by commercial farms when a young stallion, whose early supporters are demonstrably disposed to use new sires, must compete with the rookies meanwhile brought into play on two subsequent turns of the carousel. It's an incentive to keep the faith, in anticipation of continued momentum at the yearling sales and then on the racetrack. So it's a coherent and familiar strategy, albeit not one that every farm would consider particularly necessary after a sire has passed his first tests (book sizes/sales debut) as well as Omaha Beach. Without the pandemic, however, Spendthrift would surely have been cutting him from $45,000 to $40,000. So, in effect, we're getting a 25% saving on one of the most plausible prospects in Kentucky–even though the market for the sale of his foals has basically retrieved its 2019 values.

Now we all know that our industry faces some uncomfortable challenges; and that it isn't addressing some of them terribly well. But there are another 51 weeks in the year to gnash our teeth over those. For once, let's recognize some positives. A lot of people out there seem to be eager to buy themselves a Thoroughbred, just at the moment when breeding one has become more affordable. Perhaps, after the frustrations of lockdown, the affluent have been reminded that life is for living. If not, well, purse money at some tracks is even threatening to give their investment an air of viability.

So whatever twists and turns await, the initial road out of the pandemic has proved straight and smooth. And let's not forget that we were all given some free gas in the tank.

Sure, maybe stallion fees were too steep before. But they do represent a critical variable, when other base costs–such as keep and labor–are pretty constant, and sufficient to make skimping on your choice of stallion a false economy. Given how marginal a “correction” we had to absorb, in ringside demand, we should count ourselves fortunate that the stallion farms volunteered to substitute one of their own.

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Waiting For A Cool Down In A Hot Horse Market?

The horse market, like the housing market, has been wild lately, with horses being bought sight unseen for thousands more than the asking price. Many sellers can't keep enough equine inventory to satisfy the current need.

It's been nearly two decades since amateur rider Tracy Gould horse shopped, she wrote in a recent column for the Chronicle of the Horse. In the 2000s, it wasn't unusual for horses to go out on two-week trials or to find a plethora of horses for sale under $5,000 – specifically retired racehorses.

Now, green horses –including OTTBs — are being sold without trials and horses are selling on social media platforms within days of being posted. Gold writes she doesn't need anything fancy, but she does want a horse that could do a little bit of everything, especially as her daughter grows up and hopefully begins riding. She's reluctant to buy anything without the ability to test ride and see if they “click.”

Gold hypothesizes that the horse market is being driven by the meteoric rise in people taking riding lessons since the COVID-19 pandemic hit: kids began taking riding lessons as their team sports and indoor activities were cancelled, and it's easy to social distance while riding outside. Additionally, the stock market is booming, allowing even non-wealthy families the ability to afford horses, and many people are either working remotely or have moved away from the city, allowing them more access to horses and lessons.

As people return to in-person work schedules and schools, Gold wonders if it's possible the market may cool off. Still, most people in the business of selling OTTBs will tell you that day hasn't arrived yet.

Read more at the Chronicle of the Horse.

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