As detailed in the June 17 issue of Thoroughbred Times, yearling-to-juvenile pinhookers endured an unprofitable year at 2000 sales of two-year-olds in training.

Without accounting for either the positive effects of a thriving aftermarket or the negative effects of sales company commissions and other expenses, juvenile pinhookers lost approximately $20-million collectively on the yearlings they purchased at 1999 yearling sales.

Although Keeneland's September yearling sale is historically the Wal-Mart for pinhookers, juvenile resellers have been increasingly active at the Keeneland July and Fasig-Tipton Kentucky July sales in recent years, especially the latter. As shown in Table 1, which details results for the 137 horses listed as sold at those two sales in 1999 that later went through the ring at juvenile sales in 2000, pinhookers actually made a profit on horses purchased at the two 1999 July selected sales.

Pinhookers paid a total of $12,043,000 for 137 yearlings purchased at the 1999 July sales, at an average cost of $87,905, and publicly resold 85 (62%) of them for $13,344,165, an average of $155,165. Since normal sales commission on $13.3-million would amount to about $615,000, it can be safely assumed that yearling-to-juvenile pinhookers did indeed profit from buying yearlings at the two July selected sales in 1999.

Furthermore, since the overall loss for pinhookers for the year was so large, it also can be safely assumed that these two sales were just about the only overall profitable source for horses for two-year-old pinhookers in 2000.

Most from Fasig-Tipton

Given the 1999 Keeneland July sale's near-record $581,912 average, it is understandable that the vast majority of 1999 July sale pinhooks came from the Fasig-Tipton July sale. The 12 yearlings pinhooked from the 1999 Keeneland July auction were purchased for an average price of $281,538, less than half the overall sale average.

That $281,538 is in fact very near the top end of the range where even the boldest yearling-to-juvenile pinhookers feel comfortable these days. The small number of yearlings pinhooked from Keeneland July underlines the price trap now facing yearling-to-juvenile pinhookers: Keeneland July includes many yearlings that meet pinhookers' stringent conformation requirements, but their high prices make profitable resales difficult.

The $75,037 average at 1999 Fasig-Tipton Kentucky July is a much more comfortable ballpark for yearling-to-juvenile pinhookers. At the 1999 sale, the 125 yearlings purchased for resale for $8,383,000 (an average of $67,605) amounted to 42% of all horses sold and 38% of the sale's total receipts. That made pinhookers a very substantial part of the market at the 1999 Fasig-Tipton July sale, and the relative success of the graduates of both July sales is certain to make pinhookers eager to buy at the same sales in 2000.

One group from which yearling-to-juvenile pinhookers will be buying is weanling-to-juvenile pinhookers. As the number of weanlings with high-quality pedigrees on offer at fall and winter mixed sales has exploded over the last four years, so too has the number of pinhooked yearlings offered for resale at the two July sales.

As shown in Table 2, weanling-to-yearling pinhookers enjoyed a very profitable year at the two July sales in 1999, selling 106 (of 138 through the ring) yearlings for $16,153,000. Since those 138 yearlings had been purchased for $12,986,000, that amounted to a healthy $3,167,000 profit before commissions and expenses.

With that money, plus substantial profits from other yearling sales, weanling-to-yearling pinhookers spent freely at fall and winter mixed sales, buying 205 horses that are cataloged for resale at the two 2000 July sales. That amounts to 27% of the 758 yearlings cataloged for the two sales.

Increases for 2000

The 1999 success of weanling-to-juvenile pinhookers at the two July sales resulted in a 48.6% increase in the number of horses consigned for resale at the two sales and a 57.7% increase in the amount of money invested in yearlings pinhooked to the two sales.

The 38 pinhooked yearlings cataloged for the 2000 Keeneland July sale include the two highest-priced pinhooks on record, the $1.4-million Sadler's Wells-Madame Est Sortie (Fr) colt purchased by Maurice W. Miller III, agent, at the 1999 Keeneland November sale and the $1.3-million A.P. Indy-Lovlier Linda colt bought by Paul Shanahan at the same sale. Highest-priced pinhook at the Fasig-Tipton July sale would be the $200,000 Unbridled's Song colt out of Star's Honor, purchased by agent Baden P. "Buzz" Chace at the 1999 Fasig-Tipton Kentucky November sale.

The $20-million invested in horses for resale at the two July sales amounts to a substantial increase in upward price pressure, particularly at the Fasig-Tipton July sale. Add to that the presumed eagerness of yearling-to-juvenile pinhookers to buy horses from the two sales that were their most profitable source in 1999, and it seems likely that averages will rise again at the two July sales in 2000.

Volatility in the stock market and uncertainty over the direction of the economy, though, may provide considerable counterweight to that pressure. Keeneland's July sale has already enjoyed the best of all possible years in 2000. Not only did 1998 sale topper Fusaichi Pegasus ($4-million) win the 2000 Kentucky Derby (G1), but he also was sold for stud duty in late June for a figure reported to be between $60-million and $70-million.

The commercial breeding industry could not possibly have written a better scenario leading into the 2000 July sales season.