Shrinking markets: Not only in South Africa – Turf Talk: 2 December 2018

A chilly but sunny start to a foal selling day with Warren Hill in the background. (D Allan).
A chilly but sunny start to a foal selling day with Warren Hill in the background. (D Allan).

FOR those of us embroiled in the shrinkage of markets in South Africa, it may be cold comfort to know that something comparable is happenin elsewhere. In UK and Ireland it is writ large, thus masks the negatives but the business is changing.

In this and similar columns, we have often remarked that the foal (weanling) sales are the “engine room” of the thoroughbred industry. The majority of purchases are by extraordinarily brave pinhookers – often buying in large numbers – for resale at half a dozen European yearling sales 10 months or so later.

The pinhooker dominance remains in force although the percentage of foals being bought to race (i.e. by end users) has risen steadily in recent years as buyers seek to bypass the vagaries of yearling sales, reasoning that an extra 10 months of raising the youngster in chosen premises is well worth it. For this reason, plenty of the best foals were getting upwards of 300,000 guineas, stranding even the most ferocious of pinhookers.

That sounds strong. And for some, it was. Just as good Silvano yearlings or the remaining Captain Als and Dynastys have brought strong prices to the exclusion of the progeny of most other sires.

The top priced foal last week was not a seven figure explosion, but was a Frankel colt at 600,000 guineas. (1 guinea is currently 19.8 rand – call it 20). He was bought by the owner/manager of the stud that consigned him, explained by being the main base and main adviser of Prince Fahad al Thani (Qatar) who was buying out partners. The remainder of the Top Ten foals were two more by Frankel (a notable sire of stayers, like his father), two by Invincible Spirit (an ageing but notable sire of speed), three by Sea the Stars (of whom they say “Ah yes, Frankel, but Sea the Stars did it at a mile and a half as well”), and one each by Kingman and Oasis Dream.

 FRENCH Derby winning son of Deep Impact STUDY OF MAN being shown having arrived to start his career at Lanwades Stud (D Allan).
FRENCH Derby winning son of Deep Impact STUDY OF MAN being shown having arrived to start his career at Lanwades Stud (D Allan).

So what of the rest of us? Sales companies spin the sales results into something positive in every case. They would, wouldn’t they. What would you expect? “Well, sorry guys, but that was pretty awful for a lot of you”. Hardly…when the sales companies are making money in contrast to most of their vendor clients.

Tattersalls had reacted to over-production impacts. In 2017, we had foal selling days starting at 10 am and finishing after 11 pm. At relatively short notice, breeders of fillies by certain stallions discovered that their foals would not get into the 2018 sale. This amounted to a sale company telling breeders that they should not have used certain stallions on the arbitrary grounds of their fillies’ median having been too low. Screw that, said a lot of breeders. “I’m not breeding to sell below a median…I’m breeding a nice horse”. But to no avail. Brutal stuff, when no inspecting is going on. Do you want a good horse or an arguable statistic? Where is the dividing line between a sale company wanting to make maximum commission and the provision of a service to its client base?

But the sale company had to shrink the foal sales somehow. After some parts of last week, are they going to try to shrink even further?

The median prices in guineas for Tatts Days 1,2,3,4 last week were 5,000; 33,000; 65,000; 12,500. As you can see, Day 4 was more than twice as “good” as Day 1 which is par for the course but does not tell the whole story.

 This colt by Frankel stable mate Bated Breath made 185000 guineas while enjoying a bit of conversation There is a filly running in SA called Bated Breath along with two runners by Bated Breath. Confusing. (tattersalls.com).
This colt by Frankel stable mate Bated Breath made 185000 guineas while enjoying a bit of conversation There is a filly running in SA called Bated Breath along with two runners by Bated Breath. Confusing. (tattersalls.com).
 The engine room of the industry. (tattersalls.com)
The engine room of the industry. (tattersalls.com)

In a sale for which the overall clearance rate was 72%, the clearance on Saturday was 58%. 47 of the last 60 lots and 20 of the last 25 did not sell. (That includes strategic withdrawals at the last minute for which the reasoning would have been “Let’s not bother”). It was very hard work, as confirmed by that clearance rate whereas the median for the day was “only” down 7 or 8%.

At least this meant that a bottle of wine could be bought at 6pm instead of much later. Although well below zero for the first few hours, the sun stubbornly refused to be hidden, brightly warming – relatively speaking – Park Paddocks for a few hours, but long vanished at 6pm or Wine O’Clock on this particular day.

There has to be a big reason for a foal market to run out of steam. Even if catalogued very late, every foal will have been looked at 20-50 times and more, excluding second looks. That reason is over-production at a time when – as in South Africa – the number of people buying yearlings is reducing.

The digital age not only wrecks traditional High Street shopping but allows people to do things virtually or stare at screens for multifarious reasons for many hours in which, previously, they would have “gone somewhere” or “done something”. We may yet evolve into beings with no legs and with replaceable sets of fingers to suit this or that keyboard.

Seven days a week racing in UK, often multiple meetings, masks the malaise, but it is there – coinciding with over production.

One of the great pleasures of this writer over the years has been to buy mares then work to improve them. Right now, there is no market for such activity. The value in the British and Irish bloodstock markets is in horses with form. Where speculative purchases of yearlings at an ordinary level are currently suppressed by circumstance or state of mind, there is absolutely no shortage of strong money for a horse who has won his maiden and perhaps a little conditions race. And gazillions for 100 rateds.

That strength is added to by enormous demand from overseas especially Hong Kong and resurgent requirement in USA for turf runners with strong prize money on offer.

If the EU does its stuff in the coming weeks, that Horses in Training market will receive the biggest boost in South Africa, especially if the present figure of about 1550 2018 foals registered only rises another couple of hundred. South Africa is the leader when it comes to reducing over-production!

The resultant smaller numbers on offer will cause some upward pressure on prices, but domestic SA buyers can only afford what they can afford and have become used to low prices and “free” horses on lease. On-selling will fund the next purchases.

AllanBloodlines can come up with 8-10 million rand for a highly rated mile and a half colt or gelding now…but not if it takes a month of Sundays to arrive. – tt.

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