‘The industry as a whole is going into a difficult patch’
In the first instalment of this two-part series, Trevor Marshallsea canvasses the thoughts of prominent industry figures on the Magic Millions Gold Coast Yearling Sale.
Some markers were down, sometimes slightly but nonetheless significantly, the middle to lower market was a tough sell, and to some vendors, the week felt quieter than in past years, with buyers able to be more selective.
While many positives emerged from the Magic Millions Gold Coast Yearling Sale of 2025, it also brought warning signs the industry is grappling with a tight economy, while still negotiating a correction from the boom time of the Covid pandemic.
Those are among the thoughts of several industry figures consulted after the first auction of yearling season. Though some were more upbeat, and others felt the sale was at least not as bad as feared, a widespread feeling emerged that the auction was a reminder the breeding industry was negotiating tough times, impacted by economic factors such as high interest rates and political uncertainty ahead of this year’s Federal election.
While macro economic factors are out of most people’s control, suggestions for change emerged in other areas, from calls that the Gold Coast catalogue is simply too large, standing at 1,401 lots this year, to suggestions stud farms need to lower service fees, as hard times bite for breeders, especially of the smaller variety.
The Book 1 median remained static from 2024, at $200,000, while the average dropped marginally, from $275,675 to $269,388.
But the clearance rate fell significantly, from 87.88 to 82.94 per cent – and anecdotal evidence strongly suggests it was kept up by a far higher than usual number of deals done after horses were initially passed in.
As of Tuesday evening, the final figure of horses passed in from Book 1 came to 158, compared to 768 lots sold – a ratio of 20.57 per cent. In 2024, 113 were passed in and 819 sold, or 13.79 per cent.
Compare these figures to the heady year of 2022, as buyers – cashed up from the non-spending Covid years – went on a frenzy as the pandemic began to lift. The median that year was $230,000, the average $292,748, the clearance rate a whopping 93.68 per cent, and the passed-in-to-sold ratio a mere 6.75 per cent.
Two Gold Coast record prices of $3.2 million and $2.8 million last week might suggest all is rosy. And vendors have wholeheartedly welcomed new major players such as Japan’s Mitsu Nakauchida – who set that top record – and American John Stewart of Resolute Bloodstock, who bought or co-bought three seven-figure lots.
But at the middle to lower end of the market, from $100,000 to around $250,000, breeders reported widespread struggles to shift stock, especially those without the financial clout to stay in many or any of their horses, as opposed to certain larger stud farms.
Looking ahead based on events at the Gold Coast, while those canvassed believe the elite Inglis Easter sale will be essentially immune to the current economic climate, some have predicted hard times for lower-end sales.
“I felt buyers were more selective this year than they have been in the last seven or eight years, where we’ve had high volumes of buyers and really good competition on plenty of yearlings,” said Steve Morley of Queensland’s Glenlogan Park, which sold 12 lots at an average of $192,500, down from 14 at $203,571 last year.
“I did feel they were more reserved in the horses they targeted, and as a vendor I didn’t feel there were as many buyers competing on each horse as there has been in the last few years.
“For every buyer who turned up, if they normally bought ten yearlings, this year it felt like they only wanted five.
“I think it’s a general reflection of the economy, and the fact households are feeling the pain.
“Magic Millions did a great job, but there’s outside influences at play that are beyond our control.
“If everybody thinks it will just keep rolling along as it has in previous years, then they’re probably in for a reality check. There are too many things happening outside the horse industry in our current climate which mean it has to have an effect.”
Morley’s thoughts were echoed by renowned boutique breeder Linda Monds of Tyreel stud.
“I don’t want to sound too doom and gloom,” she said. “And Magic Millions did a wonderful job, from the auctioneers to everybody else marrying up horses to people’s budgets. It’s not Magics’ fault we’re going through a down time.
“But it’s obvious the industry as a whole is going into a difficult patch. That’s breeders, syndicators, trainers – everybody – because we’re a luxury industry.
“Possibly we all have to sit tight for the next five years. It could take that long. You’ve only got to just look at what’s happening around the world, and the people who invest in racing. A lot of people in the world are doing it tough. There are fewer people with that extra money to be able to spend on a racehorse.
“Those who’ve been in our industry for a lifetime will say every ten years or so come the highs and lows. You’ve got to ride the storm, enjoy the good times and get through the bad times.
“Whilst it’s hard at the time, you’ve got to remain positive and just keep moving forward, know that we’ll get through it, be patient and plan accordingly.”
Monds said buyers at the Gold Coast had been more able to sit on the fence and wait to snare horses who were passed in.
“We lost that frenzied atmosphere from a few years ago,” she said. “Buyers don’t have to buy in the ring. They’ll sit back, having done all their homework, and afterwards they’ll go and get their horse for the cheapest price they can. I get that. We’re all business people. That’s a classic buyers’ market.”
It was what happened outside the ring which separated the larger from smaller stud farms, Monds said.
“With stallion farms, a lot of them stay in. Us as small breeders, we can’t afford to pay for the service fee, raise them and pay for costs, pay our staff, run the farm, et cetera, and then run around and say I’ll keep 50 per cent or 25 per cent,” she said.
“The stallion farms can, and that’s what they do to get their horses out there running on the track, with good trainers, giving them every chance.
“In these times, the people who do suffer are the smaller farms. We’ve got to hang in there and get the job done.”
Monds is one vendor who believes the Gold Coast catalogue is too large.
“I don’t know what the answer is, but I do know it’s a huge number of horses,” she said. “It’s hard to sell that many horses.”
Arrowfield boss John Messara agreed.
“You can’t look at all the horses, so you’ve got to be selective in what you look at,” he said. “We were fortunate that the number of our lookers wasn’t down, but that mightn’t have been the case across the sale. Getting around to look at that number of horses, especially in inclement weather, is hard.”
Overall, Messara felt the sale “went better than I thought it might”, and was satisfied with Arrowfield’s performance – 45 sold and two passed in, all in Book 1, with an average of $289,667, up from $261,429 through 49 yearlings sold and four passed in from Book 1 last year.
But he said the current economy “probably contributed” to a slightly softer sale.
“There’s a bit of uncertainty, with government policy and with the economy generally with interest rates. It’s probably not much different to last year [but] as a result, you’re not in a boom mentality,” he said.
Messara said the difficult mid-to-low band of the Gold Coast market had been “a feature of the markets for the last two or three years”, blaming training costs.
“The two ends are quite polarised,” he said. “At the upper end, there’s still strong demand for the exceptional yearling, and it’s hard to shift the lesser lights. That’s a factor of the costs of training. The guy who used to be able to punt on a horse at the lower end isn’t able to do that so easily now.
“That’s the nature of the business worldwide. Costs have moved to a level where it’s difficult to make any financial impact unless you’re at the upper end. You have to have the best horses now. If you’ve only got a useful country horse, it’s very hard to wash your face.”
Veteran breeder John Muir of Southern Highlands farm Milburn Creek said current cost of living pressures in the broader economy “had to have some sort of effect” on the yearling market.
“Syndicators are looking for the mums and dads to come into their syndicates, and they’re probably not there at the moment,” Muir said. “I’d rather be positive than negative, but I do think there’s a bit of a change in the market.”
He added this changing market ought to prompt a rethink about service fees from many stallion owners.
“I think studmasters are going to have to have a look at service fees, given the current climate,” he said. “Otherwise we’re losing smaller breeders, and we don’t need to lose those out of the industry. They need encouragement.
“It doesn’t matter if you’re a small farm or a big farm, it takes a lot to put the show on. Insurance, rearing costs – they don’t change. But I do think studmasters should have a very good think about how they’re going to set service fees this year.”
Milburn Creek sold the equal fifth-highest lot at the sale, at $1.7 million. Their other six lots sold – to three passed in – averaged $235,000.
“We had one very good sale which makes up for many things,” Muir said. “It was a very selective sale.”
Widden Stud owner Antony Thompson was upbeat about the auction, saying it was “as expected, if not better”. Widden sold 33 Book 1 lots with eight passed in at an average of $359,545, compared with its 2024 Book 1 return of 39 sold and six passed in, at $346,282.
“We were down five per cent on foot traffic, but the sale saw the top hold up, if not improve,” said Thompson, adding it was pleasing to see new buyers Nakauchida, Stewart and Rebel Racing’s Phil Cunningham involved, as well as John Sargent teaming with the Laguna Partnership on their $2.3 million buy.
“They were four names you didn’t expect to be on top of the leaderboard. That was really exciting and that augurs well for us,” he said.
Thompson said the mid-to-lower band was “pretty solid”, though the sheer volume of horses meant “you’d have some who didn’t find their mark”.
“Across the board I’d say it was nice, solid results and I think we come away quite buoyed and looking up,” he said.
“Yes, the market’s down a touch, and that’s probably to be expected, but generally I’d think everyone would be feeling positive.”
While some may fear for how the Gold Coast results augur for the lower-end Classic and Premier sales, others were more optimistic.
“I did hear that there were quite a few people who were underbidders multiple times, who walked away without the horse they really wanted,” Monds said.
“They were there to buy a type, that they’ve had success with in the past, but they had trouble buying them. But those horses are going to be at Classic.
“I’m confident there’ll be buyers at Classic. It’s a smaller catalogue, and Inglis have done a really good job at trying to improve the quality of Classic.”