Oppenheim: Keeneland Books 1-2–How Good Was It?

This week at Keeneland, 681 yearlings sold in Books 1 and 2, grossing $196,645,000, and averaging $288,759. There have been 13 seven-figure ($1m+) yearlings so far, compared to nine in the first two books last year, and 116 yearlings which sold for $500,000+, compared to 96 last year. When we compare the re-formatted first two books last year to last year's Books 1-2, the $196m gross is up 4% from last year's $189.5m, and the average is up by 24% as 15% fewer yearlings were catalogued, and 16% fewer were sold. When we compare these results to the 'benchmark' results from 2015, the gross is 4% below the $204.9m in Books 1-2 that year, though the average is 30% higher, with 30% fewer yearlings sold. The clearance rate from the catalogues is 56.6% this year, versus 57.7% in 2016 and 63.2% in 2015.

But how much is the market really up? This, of course, is difficult to estimate, as nearly 200 fewer horses were catalogued in the first two books this year than last year, and over 300 fewer than in 2015. We have used the magic of interpolation to estimate where we think the market really is, if 1407 or 1530 yearlings had been catalogued in the first two books this year. Our estimate is that the market is actually up about 10% in gross and 16% in average over the last two years. In fact, we could have used the last four years, as you'll recall that since the big 30% recovery from 2012 to 2013, Keeneland September (the whole sale) has grossed $272m-$281m-$279m- $280m and averaged $97k-$102k-$99k-$102k. But it looks like there will be a little breakthrough this year, as we now estimate the entire sale will gross right around $300 million and average around $115,000.

It's all fantastic for those breeders and consignors of those yearlings which 'clear the bar' (a term from high jumping, I believe), but it looks as though that applies to about one out of three of the 1,010 yearlings which actually went through the ring at Keeneland this week. For the other two out of three it was, as we have described it before, tough sledding. That's why you don't see the consignors walking around with big grins on their faces, or, if they do sport them for a few minutes, wait until the next one or two sell. We all know how difficult it is for racehorses to make money–the APEX ratings tell us one out of eight horses which actually make the races in North America, for example, earn $63,000+ in a season–but many people don't appreciate how difficult it is to make money breeding them. A study we did some years ago suggested that even in strong markets, only two out of nine yearlings sold actually make money–and seven don't. Two years ago, the first two books of Keeneland September saw a 63.2% clearance rate from the catalogue; this year it was 56.6%.

Seven sires with five or more sold averaged $350,000+ at Keeneland, and six of those have averaged $350,000+ for the yearling sales season so far. Hill 'n' Dale's Violence, a son of Medaglia d'Oro who has been described by several judges we know as “the best-looking stallion in Kentucky” has made a bright start to his stud career, with 12 winners on all surfaces, three black-type winners, and ranks second by earnings on the 2017 North American freshman sire list (click here). He had seven yearlings average $399,286 in Books 1-2, which now takes his average for all the sales to $178,162, with 26 sold from 30 through the ring. He's one of three North American freshman sires averaging over $150,000 at the sales so far, and in fact he ranks third on average in this group, behind Claiborne's white-hot Orb, who has had 37 yearlings (of 42 offered) average $260,696, and Darley's Animal Kingdom, who has had 12 sold, from 20 offered, for an average of $184,779.

Gainesway's Tapit and Claiborne's War Front are the two leading sires, both in Books 1 and 2 and for the sales season cumulatively. Tapit had 16 sell/26 offered this week for an average of $990,625 and has now had 20 sell/34 offered for the entire sales season, for an average of $912,500 (click here-NA sires of yearlings). War Front was 15/27 at Keeneland for a $770,000 average, making him 18/32 for the sales season, with an average of $733,624. Darley's Medaglia d'Oro was 28/39 in Books 1 and 2 ($419,643) and is 33/46 overall, for a $449,242 average. Hill 'n' Dale's Curlin was 26/42 in Books 1-2 for a $384,615 average, making him 32/55 overall, for a $394,531 average over 11 times his 2015 fee of $35,000. WinStar's Pioneerof the Nile is 33/46 at Keeneland for a $373,030 average, and 36/53 overall, with an average of $380,138. And Coolmore Ashford's Scat Daddy, who as we know stood his final season in 2015, also for $35,000, had 42/63 sell at Keeneland for a $366,071 average, and is now 58/82 overall, for an average of $351,991. These are the elite of the elite.

Airdrie's Cairo Prince, from Pioneerof the Nile's first crop, continued his strong run by topping even Three Chimneys' leading first-crop sire Will Take Charge in Books 1-2, where Cairo Prince had 8/13 sell for an average of $283,125, whereas Will Take Charge had 16/20 average $235,625. Overall, Will Take Charge is still the leader, with 27 sold of 33 offered (82%, very good) for an average of $244,444 (click here-NA first-crop yearling sires); Cairo Prince ranks number two, with 25/31 (81%) averaging $211,400. Ashford's Verrazano sold very well this week, with 14/16 averaging $211,214, and now ranks fourth overall, with 25/31 (81%, same as Cairo Prince) averaging $169,251. Three Chimneys' Strong Mandate had just a single $100,000 yearling this week, and still ranks third among first-crop North American yearling sires, with 7/10 averaging $205,825, but with 37 catalogued next week that average is bound to fall. Lane's End's Noble Mission went 5/12 in Books 1-2, for a $150,000 average, and overall is 13/27 for an average of $112,076. WinStar's Fed Biz is 14/16 overall, and is the sixth NA first-year sire with a six-figure average so far ($107,857); he also had one sell this week ($150,000) and has 43 catalogued next week.

Most notable other development of the week was that peace has clearly broken out between Godolphin and Coolmore, as among Godolphin's purchases were six yearlings by Coolmore stallions–three by Scat Daddy, two by Australia, and one by Lookin At Lucky. This is really good news, as the war artificially divided the marketplace and undoubtedly cost breeders money, plus prevented very much intermingling between Galileo and Dubawi. And we don't mean to ignore Fasig-Tipton's Turf Showcase sale last Sunday, though it does seem a long time ago, and really should be mixed in with Keeneland second-week yearlings when we do all the totals. Contact Bill Oppenheim at bopp@erb.com (cc suefinley@thetdn.com).