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Bill's Columns

KEENELAND JANUARY: THE TRENDS CONTINUE

Date:
This article originally appeared in BloodHorse Daily .
By Bill Oppenheim
Those who were in the thick of battle at Keeneland’s January Sale last week will testify to the strength of the market, at least for ‘the right article’, and the sale apparently continued the momentum which has carried the North American and European auction marketplace to ten-year (post-crash) highs, with the sale’s gross of just a shade under $35-million ($34,996,000 to be precise) marking a 21% gain over last year’s edition, while the average of $38,499 was a 28% gain over last year. Most importantly for consignors, the 909 sales were 57.4% of the 1,583 catalogued, an increase of 6.6% over last year’s desultory 50.8% clearance rate.
However, in an historical context, the 2018 figures really just marked a return to the levels at which the January sale had been operating since 2012. There are two interwoven ‘givens’ in assessing the results: first, that unlike yearling sales, the composition of the catalogue can have a big effect on prices at mixed sales; but second, as Keeneland Sales Director Geoff Russell commented to me a few years ago, buyers have a certain amount of money to spend, and they will buy the ‘best available’ whatever the longer-term picture of available pedigrees might be. No matter how the overall numbers compare to past editions, those on the ground confirm “the ones you’d want” were “expensive” to “clean out of range”.
By comparison, though, Keeneland January 2018 grossed $34,996,000 and averaged $38,499, gains in the ‘twenties over last year’s corresponding figures of $28,785,500 for an average of $29,954. But the 2017 sale had been significantly down on the previous year, in fact the 2017 January sale gross dropped 19%, or almost $7-million, from 2016, while the 2017 average dropped 12%. This year’s nearly $35-million compares favorably with last year’s $28.7-million, but in previous years the sale had grossed: $35.4-million (2016); $35.3-million (2015); $41-million (2014); $45.2-million (2013); and a hair under $38-million (2012). This year’s $38,499 average was better than the $34,099 average in 2016, but was in the neighbourhood of the average for the previous four years: $37,242 in 2015; $39,947 in 2014; $40,912 in 2013; and $37,878 in 2012. Probably the message there is that the 2017 catalogue, and possibly the sale itself, was weaker, but otherwise this year’s sale was as much about reclaiming lost territory as it was about surging ahead.
Through the 2017 yearling sales season, five North American and European sires marked themselves out as the ‘elite of the elite’, with yearling averages over $650,000: Dubawi, Galileo, and Frankel in Europe; and Tapit and War Front in North America. No other sire averaged over $400,000; Medaglia D’Oro came closest, with 44 yearlings averaging $397,018 (and gets a special commendation for having no fewer than five Eclipse Award finalists), but there is a yawning gap of over $250,000 between number five (Frankel) and number six (Medaglia D’Oro) on the list. This year, the 2015 Triple Crown winner American Pharoah has his first yearlings, and one of the things the Keeneland January sale told us is that his yearlings are liable to average somewhere in these ranges. He had his second million-dollar 2017 foal at auction when M.V. Magnier was the signatory for the half-brother to Caravaggio which sold on Jan. 9. American Pharoah has had 34 foals of 2017 (weanlings and now ‘short yearlings’) catalogued between November and January, though only 18 of them have actually gone through the ring, of which 13 have sold, for an average of $467,308. He will no doubt have the statistical disadvantage of having a massive number of yearlings catalogued, but, however one assesses his commercial history to date, he is as exciting a prospect for North American breeding as Frankel has been for European breeding.
American Pharoah is the headline act, but the crop of sires which had their first foals in 2017 (I designate those as F2017 sires) appears to have a good deal of depth, especially in the U.S., where eight sires have now averaged over $80,000 for their first-crop weanlings/short yearlings – but also illustrate the polarization in the marketplace. Lane’s End stands the two-three by average: A.P. Indy’s last top son, Honor Code (10 sold, for an average of $198,500, but he did have 27 catalogued, and 19 through the ring): and Liam’s Map, one of three seriously promising sons of Unbridled’s Song who will attempt to redeem their sire’s reputation as a sire of sires (the other two: Will Take Charge, who has his first 2-year-olds this year; and Arrogate). Liam’s Map has had 13 weanlings/short yearlings average $143,077, though here again he had 30 catalogued, and 19 through the ring. The fact that the three top F2017 sires on average have only had 38%, 37%, and 43% respectively sold of those foals of 2017 thus far catalogued does reinforce the view that prices are high and the market is strong – but very much not across the board. You do have to clear the bar, and the bar appears to be pretty high – especially if, as the breeder, you have to pay the stud fee once the horse is catalogued, yet you have less than a 50-50 chance of it actually getting sold.
WinStar’s Carpe Diem has averaged $112,737 for 19 weanlings/short yearlings sold (44% of 43 catalogued), followed by Hill ‘n’ Dale’s Bayern, who has averaged $100,714 for 14 sold (54% of 26 catalogued). Airdrie’s Summer Front has had 11 sell (38% of 29 catalogued) for an average of $92,091. Claiborne’s Lea is the real star by clearance rate, with 17 sold, for an average of $88,294, from 23 catalogued, a clearance rate of 74%; when you think he is down to $7,500 for this year from an opening $12,500, Lea has to rate as one of the big bargains of 2018. Finally, of those averaging over $80,000, Lane’s End’s Tonalist averaged $86,294 for 17 sold, which is 56% of the 30 catalogued. Taken together, the top eight North American F2017 sires have had 114 weanlings/short yearlings sold, which is only 47% of the 242 catalogued. Polarization: ‘they’ either want them, or they don’t.
There is another group of mixed sales of mares in foal from 2017 coverings and 2017 foals (‘short yearlings’) which will impact the mixed sales averages: Barretts has a sale on Jan. 17, OBS later this month, and next month there are February Mixed sales at Fasig-Tipton Kentucky, and at Tattersalls, Goffs, and Arqana in Europe. Cumulatively, all the mixed sales in the first two months of the year constitute less than 5% of the annual North American and European auction marketplace; nonetheless, in their own way they are still important indicators both for the marketplace in general as well as for individual sires.
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LEADING SIRES OF WEANLINGS / SHORT YEARLINGS (2017 FOALS)
NA-EU Mixed Sales Oct 2017 - Jan 2018 (2017 Coverings)
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Source: Bloodhorse
Sire ST Current Stud Conception Stud FFLYR Cat Ring Sold S/C Gross Avg D Avg P Avg E High D
Dubawi (IRE) ENG