2009 – The Year of the Small Breeder

By Jude T. Feld

“Indeed, in the last three months the business has become incredibly unstable. Witness: The devastating results of the Keeneland November sale; reluctance of mare owners to commit to bookings; steep cuts in stud fees; plummeting handle and purses; cash-flow challenges at farms large and small; and a dearth of new Thoroughbred owners. Compound this situation with a financial crisis that prevents access to fresh capital, and you have the makings of a full-blown calamity.”
Blood-Horse Publisher Stacy Bearse

“Let me assert my firm belief that the only thing we have to fear is fear itself.”
President Franklin D. Roosevelt

“A full-blown calamity,” Stacy Bearse calls it.

But, is it really?

Hadn’t things gotten a bit out of hand?

Didn’t stallions opening their stud careers at $100,000, light-pedigreed two-year-olds in training selling for $16 million and people turning down $7 million for a yearling and then trying to syndicate him for twice the price indicate that the Thoroughbred world had gone mad?

We sell dreams people.

A horse is really only worth how much soup you could make out of him if nuclear war broke out. The rest is all smoke and mirrors.

One summer, when I first moved to Kentucky, I worked at a small farm that was prepping yearlings for the Keeneland September sale. We had a lovely filly by Pulpit who moved like a ballerina and was perfectly correct. Inquiring to one of the fellows who owned her in partnership what the asking price was, I was told $800,000.

About a month before the sale, trainer Richard Mandella offered $700,000 for her on behalf of a client. He was rudely turned down – as if he had the audacity to haggle over this magnificent creature, who, as luck would have it, never garnered $800,000 in the sales ring or privately and subsequently never won a race.

This was a display of sheer arrogance that has pervaded our business for some time.

$700,000 is 25 years worth of paychecks for the single mother who works at Victoria’s Secret. It is a very nice home in California or a small farm in Kentucky. It would put a few kids through college or, if the TV commercials are to be believed, feed thousands of children in Africa.

We needed to get real.

Can you believe it? Orgasm sales are down.

With the death of Storm Cat, at least the top has dropped to $300,000 a pop and now you don’t have to pay your stud fees before your foal is born – most everybody is back to “stands and nurses.”

What Kool-Aid were we drinking, paying gazillions of dollars for stud fees, months in advance of foaling? These equine versions of the Bunny Ranch had us by the testicles and then squeezed a little more.

After spending $300,000, how fortunate do you have to be to get a sale yearling worth the stud fee? All the stars have to align, the legs need to be put on right, the balance and the presence need to be evident to Jose Feliciano and nothing must happen in the field between birth and sale day to scar or mar any square inch of your budding champion lest he be relegated to Book Six because he has a few white hairs on his knee where he brushed the fence one stormy afternoon. Even then, with a $300,000 sale, you’ve lost a considerable amount of money.

Too rich for your blood? How about trying your mare with a $100,000 stud? “First year sire with lots of pop,” the stallion man tells you. “We’re breeding 25 of our best mares to him. Only a few seasons left. I think he could be the next Northern Dancer. Better sign that contract today before he’s sold out.”

You’ve got a mare who is stakes-placed at Ferndale going a mile and five-eighths and she crosses perfectly with this speedy new wonder-sire. Two Rasmussen factors and a Werk Nick Rating of A++++583,234! Tesio never had it so good.

Two years later, you put a $5,000 reserve on your “dream mating” filly at the Fasig-Tipton October Sale. She has a beautiful body, but one leg points to Fair Grounds and the other one to Charles Town. Doesn’t mean she can’t run, but not too many people wanna take a shot on a racing prospect who walks like a penguin…including you.

Horse people are optimists. We have to be. But we need to learn not to back our hearts with our wallets. We are breeding too much crap.

Chances are, Book Eight yearlings and October yearlings should have never been bred.

“Let he who is sinless cast the first stone.”

I once mated Moaning Lisa, a Northern California maiden claiming winner, to West Boy (Brz), a multiple claiming winner from a family of many starters and came up with Boys Don’t Moan, who broke his maiden at Hollywood Park.

McLaughlin Girls was another crazy idea. Named for my brother’s sister-in-laws, she was by Fairplex maiden claiming winner Secretary Forli out of Nifty Margie, a speedy filly who often faded in the shadow of the wire, despite the presence of Ribot in her pedigree. McLaughlin Girls broke her maiden in the Bay Area and then had a modest career in the Pacific Northwest.

Just what the world needs – more field fillers. It seemed to make sense at the time – having a few Cal-breds to run and pick up the lucrative breeders awards, but these horses were never gonna be anything but claimers unless we got immensely lucky.

With today’s training costs and veterinary care, a horse needs to make at least $50,000 to be viable. Go through the Daily Racing Form and see how many horses on any given day don’t pay their way. Just like your computer, it’s garbage in, garbage out.

Handle drives the purses and people don’t want to bet on state-bred non-winners of two in for $7,500 claiming prices. They want to see nice horses and full fields. That’s why racetracks have gone to the multi-stakes formats and one reason the Breeders’ Cup World Championships are so popular with gamblers – nice horses and full fields. This should be racing’s mantra.

Breeding crows has got to stop. If you want to gamble, bet the Pick Six – at least it helps the handle and thereby the purses.

“The only thing we have to fear is fear itself.”

Now is the time to spend.

Small time breeders have a better shot to make a nice profit on this “calamity” than they might think. As usual, what you spend on stud fees in 2009 will not be returned until 2011, but you won’t owe a dime until 2010! A huge boost to cash flow and a boon to the little guys.

Breed your mares to the hilt – “chunk it in” as they say.

If the economy isn’t better by 2011, you will be making soup out of your breeding stock and if it is better, which it more than likely will be, aggressive breeding decisions will payoff in large quantities of currency, when other people are trying to peddle horses by less than desirable stallions that they bred to on free seasons and using dubious deals.

We are in a gambling business and now is the time to “go all in.” Otherwise, buy a French cookbook and plant some celery, onions and carrots.

This entry was posted on Wednesday, December 31st, 2008 at 1:11 pm and is filed under Featured Articles. Responses are currently closed, but you can trackback from your own site.