by | 11.17.2010 | 12:46am

By Ray Paulick

Bloodstock prices continued their downward spiral on Tuesday during the second session of the Keeneland November breeding stock sale, and after two days total receipts are down almost 50% from one year ago and are the lowest in years.

The Lexington, Ky., sale company reported there were 150 horses sold on Tuesday for $42,006,000, a decline in revenue of 39% from the $69,435,000 gross in 2007. The average of $280,040 was a decline of 25% from $373,306 recorded last year, and the median fell by 27.3%, from $220,000 to $160,000. Tuesday's buy-back rate was 34.2%, down from Monday's 38.2% but still extremely high and an indication of how soft this market is.

Cumulative figures are worse, in part because last year's opening session set an all-time record for gross revenue. After two days, Keeneland has sold 299 horses for $90,027,000, down 49.6% from a year ago when 380 horses brought $178.489,000 the first two days. The two-day average of $301,094 is a 35.9% drop from $469,734 in 2007, and the median fell by 32%, from $250,000 to $170,000. A higher number of horses, 315, were withdrawn from the catalogue (145) during the first two sessions or bought back by consignors (170), than the 299 that were sold. The aggregate buy-back rate is 36.2%.



Keeneland November Cumulative Prices for First Two Sessions:


Year Sold Revenue Average Median







































































The top lot to sell in the early stages was Hip 374, J Z Warrior, which agent Olin Gentry purchased for $1,125,000 on behalf of an unnamed female client from Washington state. J Z Warrior was the first racehorse or broodmare prospect to sell from the Zayat Stables consignment being handled by Eaton Sales. J Z Warrior is a 3-year-old stakes-winning filly by Harlan's Holiday.

Half Queen, a 12-year-old Deputy Minister mare in foal to Distorted Humor, brought a higher hammer price of $1,650,000, but she was bought back by her owner. Hagyard Farm, agent, consigned the mare, who produced 2003 champion 2-year-old filly Halfbridled.

The mood of the sale is anything but upbeat. Asked about the health of the market, one agent standing near the outside ring behind the sale pavilion pointed in the direction of a near empty viewing area. “That should tell you a lot right there,” he said. “There's not many people here.”

However, another prominent commercial breeder said the prices represent a much-needed correction in a market that has been inflated in recent years by newcomers to the breeding industry. “Prices have been so out of whack for mares in recent years because of the presence of outfits like ClassicStar and a number of billionaires from other industries who decided to get into the breeding industry,” he said. “They drove up mare prices to the point that they couldn't possibly make money selling yearlings out of those mares, and that made it much more difficult for us. I think it's a healthy change for commercial breeders who are in this for the long haul.”

One agent commented that he heard a rumor that as many as 20% of the horses being sold are “owned by banks.” A representative of one major lending institution said his bank had liens or interests in about 325 of the horses being sold. “There are a lot of horses in here where the money will go straight to the bank,” he said, adding it wasn't that unusual an occurrence.

“There is still money out there to be borrowed,” he said in reference to the recent crisis in the banking industry and financial markets that resulted from the sub-prime mortgage fiasco in the real estate world. “The banks might be tightening the amount they're willing to loan on a horse, maybe only 40% of its appraised value versus the 50% that had previously been the standard.”

The session was topped by the $2.4 million Mushta, a racing filly from the Zayat Stables consigned by Eaton Sales, agent. Fran Abbott signed a ticket to buy the 3-year-old graded stakes winner on behalf of Betty Moran's Brushwood Stable, The Empire Maker filly will continue to race under the care of trainer Bill Mott. Mushka, whose dam, Sluice, is a half sister to multiple grade I winner Lakeway.  Mushta won the Grade 2 Demoiselle Stakes at Aqueduct last year. Zayat purchased Mushka for $1.6 million as a yearling at the 2006 Fasig-Tipton Saratoga sale.

Mushta was one of seven horses purchased for $1 million or more on Tuesday, compared with 11 during last year's second session. The cumulative number of seven-figure purchases is 18, less than half of the 39 sold at this point in 2007.

“There's no depth here,” said one horseman. “The best mares are still selling, but below that top level it's not good. And there's virtually no market for older mares right now.”

“There was more uniformity to today's session; it was more comparable to the Tuesday session last year,” Geoffrey Russell, Keeneland's director of sales, said in a press release. “We saw active bidding from a wide range of people and countries,” he added, noting that the market continued to place a premium on quality young race fillies.

Click here to see results and a summary of leading buyers and consignors.

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