“Buddy, Will You Buy My Foal?”

An Overview of the Market for Sport Horse Youngstock in the US, Ireland and the UK

by Ginny Smith

Chip in field

The end game for every breeder, whether professional stud or hobby breeder, is to produce foals that will arrive in the world strong and healthy, and that will, on weaning, find an eager buyer at an economic price that comfortably covers the outlay on stud fee, vets fees, mare keep, fodder .... and provide a decent return on that outlay. Even better if the youngster then goes on to achieve outstanding success under saddle in the hands of its new owners, with the reflected glory helping to build the reputation of the breeder, and ensure more sales. A pipe dream? It has seemed so for many breeders during the recession of the past two years.

Partly as an exercise to reassure myself, (with one yearling as yet unsold and another foal due on the ground in May), I set out to search for evidence of the famous green shoots of recovery and to investigate others’ experience of selling foals and youngstock in the current market. I also wanted to explore how the UK market currently compares with Ireland, and North America. What follows is in no way a scientific analysis of the markets, but a whistlestop tour, drawing largely upon anecdotal evidence, and the personal experience and impressions of sport horse breeders in the different areas.

There do seem to be strong signals emerging from the US of an upturn in the market, which is not only driving sales on the North American continent, but beginning to provide buyers for youngstock in Ireland and Europe. (Interestingly there seem to be established routes for the US buyer seeking eventers, showjumpers or hunters, and most appear to swerve round the UK!) Edgar Schutte of the Hanoverian Breeding and Training stables at Rainbow Equus Meadows, reports that breedings to his stallions are following the same pattern as last year, which was up 15% on 2008 – a sure sign that mare owners are feeling more optimistic about foal sales in the future. But Edgar also makes the point that some single stallion owners, or those who haven’t yet built up a reputation, are finding it much harder. He says, “I believe many people that did have the money were still reluctant to spend it last year and many are jumping back in the market now .... We see this across the board in Hunters, Jumpers and Dressage. Tired of waiting, going forward living life again, enjoying horses, showing, etc.” He sees pricing as still being advantageous for the buyer, and describes buyers as being more picky and scrutinising potential purchases more carefully than several years ago.

Victoria Holstein-Childress, a sport horse breeder based in Northern Virginia, also believes that the US is seeing clear signs of a recovery in the market, though still patchy, and believes that location can have a significant influence. She benefits from being based in the heart of horse country near Washington DC. She sees sales of top horses being buoyant, but says that it is much harder to sell the medium quality horse in the current market. Her breeding plan anticipates keeping all her youngstock until they are started under saddle.

These themes - the protection that a strong reputation in the marketplace has provided for some breeders against the worst impact of the recession, the influence of location, and the greater struggle that small and hobby breeders face to sell their youngstock, are common across all the markets that we explored.

In Ireland, Paul Doherty of Ballyshan Horses reports that he has had double the level of American and Canadian interest this year than from Ireland, but thinks that the UK is still a good market for the ready-made article. As regards the sale of foals and youngstock, he believes that the likes of Cavan Equestrian Centre have turned a corner with some commercial returns seen for the breeders with the introduction of the Elite Sale where foals are selected for their bloodlines, movement, athleticism and type. The astute young horse producers are still in the market, with Linda Courtney buying some of the higher-priced foals last year at the Elite sales. But again, for the “bread and butter” horse, the buyers are simply not there at the moment – certainly not when it comes to youngstock.

Paul and his brother Gary demonstrate that it is possible to flourish as a smallscale breeder even in tough economic times if you have an excellent mare base and an outstandingly good eye for a stallion! The second foal that they bred, Ballyshan Arkansas, qualified as a five year old for the World Championships in Lanaken, and they now have other youngsters competing successfully in the States and in the UK.

Tom Reed of Morningside Stud is an example of a breeder who has built an international reputation over the years through the quality of the stallions standing at Morningside, and their offspring. Foals and youngstock sold to European buyers are now out competing under saddle and achieving a string of impressive results, all contributing to further successful sales. Morningside bred the 4- and 5-year-old champions of the KWPN’s ISF Cup Showjumping Championships; their youngsters are representing Ireland and Portugal in the Young Horse World Championships in showjumping and eventing; they also bred the Vice-Champion Showjumper in France’s Future Elite Series. Tom describes their main markets as being Latin America, the US, and Europe - Ireland has never been a core market for them. He has seen no change in demand for his foals in the past couple of years, and is receiving the same prices as several years ago. He does not have to actively market his youngstock; buyers find the stud through word of mouth. He has a number of clients who have been important repeat customers over the last seven years or so - any breeder would long to be able to say that! Tom expects the US and UK markets to pick up over the next year or so as the economies recover, but in the meantime has a sufficiently widespread buyer base to compensate for the downturn in any one marketplace.

And so to the UK ...... where the themes are the same, but the current market for sport horse foals and youngstock seems particularly tough. Foal auctions in 2009 saw many remaining unsold, and prices being significantly lower in comparison with the boom years of 2006/7. Danielle Nazaruk of the Vagelloron Stud, provides a vivid description of her experience : “I find living in Wales a problem when selling horses, as people are very reluctant to travel to see horses for sale”. She has been to Malvern three times to sell youngsters – “The first time was in 2008 when I took a yearling coloured filly by my KWPN coloured stallion Vagebont and my head studbook Trakhener mare Opuschka. She didn’t even come close to her reserve price, and neither did the youngsters that were there on the day, whereas ridden horses went for an OK price” The second time was last October, when she took a full brother of the coloured filly, and he also failed to reach his reserve. In both cases she sold the yearlings privately soon after withdrawing them from the sale ring, for the asking price.

Two weeks ago she tried again, this time with a 2 year old bay gelding by Vagebont out of a Still Time Left mare – he reached £450 in the ring, and was withdrawn. Danielle describes seeing a lovely well-bred filly being sold for £300. Ridden horses were once again selling quite well. She says that although there were a fair number of buyers at Malvern, “People just don’t want to put their hands in their pockets in order to pay an acceptable price for a youngster, yet ridden horses with vices such as weaving and cribbing, with splints and windgalls, seemed to be selling for around the £3k mark”. She comments that “people expect to pay peanuts for a youngster but obviously they haven’t realised the actual costs that are incurred for breeding a quality youngster”. She is concerned that if many breeders decide to take the same route as herself - to stop breeding themselves, but to become “pinhookers” as they are known in TB sales circles - buying up 2 or 3 year-olds and selling them on after a year - British breeding will slowly come to a stop.
 
But although the market does appear to be more challenging for British sport horse breeders than for their US counterparts at the moment, the picture is actually more differentiated. Sales of quality showjumping and dressage foals, for instance, have held up rather better than those for eventers. And as the manager of a large UK stud who sells many of their youngstock to the continent told me, “The market is definitely tougher, and has been over the last two breeding seasons. We are lucky that we are a well-known name, and have built a solid reputation within the marketplace. Our clients know our breeding policy, and that we consistently breed for a particular type, with a strong emphasis on temperament and quality. But we have had to think much harder about how we market our youngstock in the last couple of years, and like everyone else, we’ve considered using social networking sites, and thought about publicity for the stud – it goes very much against the grain, as it’s not something that we’re used to, but I suppose that the big continental breeders have been ahead of us on marketing for ages”.

It seems likely that Danielle Nazaruk’s prediction might well be fulfilled - many small and hobby breeders are likely to keep their mares empty this year and next, and may find themselves having to carry their youngstock for three to four years until they can be sold under saddle. The size of the UK industry looks likely to contract, with small breeders at the bottom of the pyramid dropping out, and some surprisingly big names also likely to be withdrawing. Downsizing and closing sales will contribute to greater numbers of quality youngstock coming on to the market in 2010 and 2011. Longer term, we might see the pattern observed in the TB industry being repeated in sport horse breeding circles – Goffs Ireland, for instance, reporting an increase of 5% in gross revenue at its November foal sale, with an 11% increase in average price, and Tattersalls December Foal Sale seeing a 39% rise on 2008 turnover, with an astonishing 26% rise in average sale price. This was in contrast with Brightwells Foal Sale in August 2009, where it appears many foals did not sell, and the prices for even the best foals on the whole did not reflect their quality.

Goffs Sale Ring

Above: sales ring at Goffs

photo courtesy of Goffs

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