Bill Oppenheim: Year-End Report: Market Edges Up 4%

YEAR-END REPORT: MARKET EDGES UP 4% 
The North American and European auction marketplace, which we cover in the Weekly Sales Ticker, bottomed out in 2010, when the sales we covered saw gross receipts of just over $1-billion ($1,033,910,608, to be precise) for 21,577 horses sold, an average of $47,917. Two years later, by the end of 2012, the sales had improved by 22%, to just over $1.25-billion. Last year marked the recovery in the horse market; sales jumped by 25%, which was $318-million, to a total of $1.574-billion and an average of $72,412. In the three years between 2010 and 2013, with virtually the same number of horses sold (21,739 in 2013 vs. 21,577 in 2010), the sales’ gross increased by 52%–over $540-million–and the average, for more than 21,700 horses sold, by 51%. 

For the most part, 2014 has been a year of consolidation. The number of horses sold increased by 5% over 2013, to 22,824. Gross receipts increased by $64-million, or 4%, to $1,638,148,392. The average for the 22,824 horses sold dipped by 1%, from $72,412 last year, to $71,773 this year. That’s essentially the description of a stable market. 
Within the overall figures there were a couple of notable ‘deviations’. The European yearling market gross increased by $58-million (17%) and, probably for the first time ever, actually grossed more than the North American yearling market: 4,179 European yearlings sold for a total of $400,588,860, while 5,295 North American yearlings grossed $396,611,300. With over 1,100 more yearlings sold in North America for slightly less money, the gap between the European yearling average ($95,857) and the North American yearling average ($74,903) widened; the European yearling average increased 9%, while the North American yearling average was down 1%. Also the clearance rate from the catalogues was almost 10% higher for European yearlings: 75.6% of the European yearlings catalogued were sold, while just 65.9% of the North American yearlings catalogued were listed as sold. That was almost 5% lower than the 70.7% North American yearling clearance rate from the catalogues in 2013. 

Combined NA plus EU yearling sales ($797m) accounted for very nearly half of the $1.638-billion total sales. What we classify as ‘second-half calendar year’ mixed sales (after the yearling sales) accounted for another 30%, or $491-million. This total was down 7% from the 2013 second-half mixed sale total of just under $527-million. Just as in the yearling sales, the North American second-half mixed sales were down 1% in gross, from $276-million to $273-million. The European mixed sales, though, as we’ve been discussing the last couple of weeks, were down by $32-million, or 13%, though we have speculated this was due to a decline in the catalogues rather than a decline in market values. Here again the clearance rate from the catalogues was higher in Europe, where it was 68.5% (down from 69.5%), while the clearance rate at the North American second-half mixed sales was just 60.9%, down from 67.7%. 

Adding in first-half mixed and 2-year-old in training sales, the overall North American market saw a 2% gain in gross ($19-million), from $899-million in 2013, to $918-million this year. The European sales added $45-million (7%) in gross, from just under $675-million to just under $720-million. The averages were almost identical: $71,983 in North America (-4%), $71,558 in Europe (+3%). 

MARKET DARLINGS: From time-to-time you see a previously unheralded stallion which becomes all the rage in the auction marketplace, thus earning the designation ‘market darling’; think of it as the auction sale equivalent of a ‘TDN Rising Star’. It’s not that ‘the market’ had a negative view of these horses going in, rather that the individuals by that sire consistently sold for well beyond what might have been expected initially. 

This year there were no fewer than three new Market Darlings at the yearling sales. Darley’s Poet’s Voice (Dubawi), who defeated Rip Van Winkle by a whisker in the 2012 G1 Queen Elizabeth II S., is a very good-looking horse himself, according to the judges, and he was certainly siring same: 56 yearlings from Poet’s Voice’s first crop (of 69 offered) averaged the equivalent of US$157,154, making him the leading first-crop yearling sire (click here). Claiborne’s Trappe Shot, by the all-conquering Tapit, surprised as the leading North American-first year sire, with an average of $125,968 for 62 sold (of 77 offered). Trappe Shot had run second to Lookin At Lucky at nine furlongs in the GI Haskell as a 3-year-old, but as a 4-year-old in 2011 he won the GII True North H. at six furlongs. The third F2013 Market Darling is Coolmore’s Zoffany (Dansili), who won the G1 Phoenix S. as a 2-year–old but probably ran his best race when he nearly caught Frankel in the 2012 G1 St. James’s Palace S. Zoffany had 103 yearlings sent through the ring, of which an astounding 94 sold, for an average of $80,196.