US Thoroughbred Sales
US Thoroughbred Sales

US Thoroughbred Sales

(Photo : Keeneland)


JOCELYN DE MOUBRAY - The decline in the quality of Thoroughbreds bred in the United States has been greatly exaggerated. The U.S. bloodstock industry has declined in many ways since the boom years, which ran from the mid 1970s to the mid 1980s, but there is no obvious reason to believe that American breeders are producing inferior horses today.

On the other hand, it is not all that surprising that so many European bloodstock professionals are convinced that U.S. breds today are inferior to those of the 1970s and 1980s. In the 1980s the progeny of U.S.-based sires were the dominant force in European racing. In 1988, according to The Racing Post’s figures, 50% of all the 3-year-olds rated higher than 110 in Europe were by American sires, by 2001 this figure had fallen to 20% and in 2011 to 10%. This year has been a good one for U.S. breds in Europe and the figure for 2012 3-year-olds was about 14% at the end of July. However, it is easy to see why people have jumped from this evidence to the conclusion that, thanks to medication rules, the racing programme, errors of selection or whatever is their chosen culprit, the quality of U.S. breds has declined dramatically.

The evidence is there, if you look at the results of the major races in England or France during the 1980s around half of all the winners were U.S. breds, but it can be looked at in a different way. First, the distribution of the world’s Thoroughbred population has shifted during the same time period. Throughout the 1980s the U.S. foal crop averaged 46,000 and for three years, from 1985 to 1987, it was over 50,000. This means that during the 1980s, the number of foals born in North America was more than double those born in the major European breeding countries of Ireland, England, France, Germany and Italy. From 1952 to 1986, the U.S. foal crop rose every year bar one, climbing from about 9,000 to 52,000, since there have been two major declines and a slight recovery. From 1986 the foal crop dropped 32% over 10 years to 1995, there was a slight recovery of 10% over the next decade, and then, since 2005, the foal crop has plunged again, falling by nearly 40% to the projected figure for this year of 24,000, which by an accident of statistics is exactly the same as in 1971, more or less the beginning of the great bloodstock boom.

At the time when U.S. breds were dominating European racing there were overall twice as many of them as there were European breds, by 2005 the number of European breds had risen to 80% of the U.S. total, and although there has been a decline in Europe in recent years, it has not been of the same magnitude as in the U.S. and so this year’s crop will be around 90% of the U.S. total.

It could be that U.S. breds are every bit as competitive as they were in the 1980s, there are just many fewer of them and many fewer are sent to race in Europe. The number of U.S. breds exported to Europe has fallen by 40% since 2001 and, although exact figures are hard to come by, it is a fair guess that, of the 2-year-olds going into training in the major European racing countries in 2014, fewer than 10% will be U.S. breds.

The great bloodstock boom is long enough ago for even those who were there to experience it to have forgotten quite how crazy and extreme it was. The U.S. bloodstock boom should be in economic text books alongside the tulip mania of Holland in the mid-17th century. For seven years from 1976, the average price at the Keeneland July Yearling Sale rose by at least 24% every year, and twice in 1978 and 1984 by more than 40%. During this time, the format of what was of course the best yearling sale in the U.S. remained the same with between 300 and 350 yearling sold every year. The average rose from $54,000 in 1975 to $540,000 in 1985. This was a period of high inflation, but for those looking for an inflation proof investment there was at the time nothing better than bloodstock, even in real terms the average rose by more than 400%. To put these figures in their proper perspective, you only have to put them into today’s money. In 2011 dollars, the average price at Keeneland’s July Sale went from $220,000 in 1975 to $1.2 million in 1984. In 1984, Keeneland was able to sell 323 yearlings at an average price the equivalent to $1.2 million in today’s money, and the 165 colts at the sale averaged $1.4 million.

This was a pure speculative boom and had nothing whatsoever to do with any individual stallion who happened to be in Kentucky, or even in Canada, at the time. For those in place with the horses to sell, it must have seemed as if it was raining $100 bills. For a time the major Kentucky studs had so much money they could buy any potential stallion in Europe, or elsewhere if they felt like it, just for fun, or to fill in a quiet afternoon. There was a stampede to join in the fun and the U.S. foal crop doubled during the boom years, while of course stallion fees soared to seven figure sums.

It couldn’t possibly have gone on and the fall was steep with the average price of the 8,000 yearlings offered annually in the U.S. losing half its value between the peak of 1985 and 1992. The Keeneland July Sale limped on to 2002, but by 1992 there were only 183 sold at the sale for an average of $400,000 in today’s money. In many ways this boom was so extreme that the U.S. bloodstock industry has been unbalanced ever since and may only now, some 25 years later, be finding a new equilibrium, which may well turn out to be far closer to what the business looked like in the early 1970s, to what it became during subsequent decades. From 1988 to 2011, the U.S. foal crop declined by 45% and the number of races run in the U.S. fell by 36%. From 1991 to 2011, the number of active Kentucky-based stallions halved from 500 to 250. There was a tentative recovery at the end of the 1990s, but of course, recent events have seen the foal crop fall again sharply from 2008.

These statistics will not convince those who wish to argue about medication, racing programs or selection. There is always a tendency to blame unsoundness on something specific, when in fact it is, on average, one of the characteristics of all Thoroughbreds whether they are by Galileo, Dansili, Distorted Humor, Deep Impact or any other stallion anywhere else in the world. When it comes to stallions, bloodstock people tend to be conservative and stick to what they know or see before their eyes, when it often turns out that if they tried something else it might work just as well if not better. For a long time U.S. breds were seen to be inherently superior, which they weren’t, and today they are seen by many to be inherently inferior, which is in all probability an equally misplaced conclusion.

U.S. racing and breeding present a great opportunity. The most positive figures, particularly for those looking from England or Ireland, are those concerning prizemoney. Since 1988, the average prizemoney per race in the U.S. is up by 29% in real terms. And then horses like Elusive Kate, Aesop’s Fables, Main Sequence, Princess Highway and Reckless Abandon have shown that there are still plenty of U.S. bred or sired horses capable of competing with the best in Europe.

Extract from The Racing Post