Yearling market on the rise, will stallion fees follow suit?
‘You have got to make sure everyone remains in the industry, not just the few that can survive the humps and the hollows’
The Australian yearling market is like a runaway train, record after record with no end in sight. So what effect will the remarkable surge in demand have on the 2021 stallion service fees – just 12 months after the majority of stud farms dropped their prices as a way of encouraging breeders to have their mares covered due to the prospect of coping a hip-pocket hit this year.
The Inglis Australian Easter Yearling Sale, which is just four weeks away, is often used by the country’s major stallion operations to launch their new recruits and announce the service fees for their respective rosters.
The timing of the prestigious sale also comes after the majority of the significant Group 1 autumn races in Sydney and Melbourne have been run, which can have a big say on particular stallions’ popularity and ranking on the pecking order with breeders. Results at preceding auctions are also a significant factor considered by farms before setting their fees, so this year’s figures will have a bearing on service fees.
Given owners’ and trainers’ appetite to participate in the yearling market, pushing aggregates and averages to all-time highs this year after a period of sustained growth, there must be some temptation for studs to cash-in on the strength of the domestic racing industry by re-evaluating their fees after almost across-the-board cuts last year.
So far this year, after the hammer has fallen at the Magic Millions sales on the Gold Coast, Perth and Tasmania, as well as Inglis’ Classic and Premier sales in Sydney and Melbourne, 2661 Australian-sold yearlings have changed hands for a total of $360.272 million at an average of $135,390, up six per cent year-on-year.
At the same stage in 2020, there had been 2434 yearlings sold for a total of $310,324,898 at an average of $127,496.
Edinburgh Park Stud’s Ian Smith urged stallion owners to take a long-term approach when considering their service fees for 2021.
“Sure, this year has been fantastic (with the yearling sales), but you have to have a broader approach to the industry and the broader approach should be that you’re fair with your stallion service fees going forward,” Smith said.
“You have got to make sure everyone remains in the industry, not just the few that can survive the humps and the hollows.
“At the end of the day, there’s an elite level of bloodstock and then there’s a lot of other horses making their mark and we need the whole spectrum of the bloodstock industry involved.
“We need the pointy end and we need the bottom end because it services everyone. It services the top trainers in Australasia and then it services your metropolitan, provincial and country trainers.”
Queensland-based Highgrove Stud’s Ron Gilbert, who operates a commercial breeding operation with a band of 24 mares, also implored stallion farms to not overcapitalise on the current market conditions.
“I’d be hoping they wouldn’t put them up and I think they should stay where they are, but they will fluctuate,” Gilbert said yesterday.
“Some horses who have gone very well this season as far as the racetrack goes, they will certainly go up, and some will probably go down.
“It’s just the law of performance on the track which dictates the end result with service fees.”
If stallion owners did try to recoup any decrease in revenue as a result of the downward shift last breeding season because of the uncertainty brought on by the Covid-19 pandemic, Gilbert warned breeders would look to alternative options.
“They (stallions) have to have some racetrack performance in the current season to go back up otherwise they will be affected by the number of mares they get and the quality of the mares,” he said.
“Everyone is pretty sensible at the moment even though the market is looking good. It is still the top-end of the market which is very strong.
“To have that sort of joy at the top end of the market, you need a good type and that is in the lap of the gods. You can spend all the money you like on service fees, but if you don’t get good types, you’re in a world of pain.”
It is fair to say that Capitalist (Written Tycoon), the current leading first season sire who has also become a sales ring juggernaut in recent months, will have his fee of $44,000 (all fees inc GST) increased significantly this year, as will his young Newgate Farm barnmate Flying Artie (Artie Schiller), the sire of Blue Diamond Stakes (Gr 1, 1200m) winner Artorius, after standing for just $16,500 in 2020.
Newgate increased the service fee of Deep Field (Northern Meteor) to $55,000 last year as the emerging sire’s stock displayed their talent on Australian and overseas racecourses, particularly in Hong Kong.
Last month, Deep Field achieved his maiden Group 1 win as a sire when Portland Sky dead-heated in the Oakleigh Plate (1100m), a feat which could see Newgate principal Henry Field and his partners considering where the son of the late Northern Meteor (Encosta De Lago) sits on the ladder.
Written Tycoon (Iglesia), whose stud home is yet-to-be determined for this year, could also be increased from $77,000 as the rising 19-year-old challenges for this season’s Australian champion stallion title by prize-money earnings.
He is currently second behind the pensioned Not A Single Doubt (Redoute’s Choice), whose fortunes have been dramatically boosted by The Everest (1200m) win of his star sprinting son Classique Legend, but with a host of promising horses the current Arrowfield Stud-based sire could usurp his barnmate this autumn.
Arrowfield principal John Messara made the decision to reduce the fee of champion stallion Snitzel (Redoute’s Choice) to $165.000 (from $220,000) last year, but after making it four straight stallion titles last season he could go back up in price again after covering a restricted book of 150 mares in 2020.
“Snitzel is not getting any younger and Arrowfield is looking after him, and covering a book of 150 is pretty smart,” said Gilbert, a shareholder in Snitzel,
“He might get up to 180 (this year), but we will leave that to John Messara. He is pretty cluey at running that side of the show. I am just happy to go along with whatever they decide.
“Whatever he goes to (fee wise) I will be using him, not just because I am a shareholder, but because he’s been the leading stallion in the country for four years in a row and that’s never been done before. That says loads about Snitzel.”
Yarraman Park Stud’s Arthur and Harry Mitchell also reduced the service fee of I Am Invincible (Invincible Spirit) last year to $209,000, down from a peak of $247,500 in 2019, and his commercial appeal remains extremely high.
So You Think (High Chaparral), the most supported stallion last year covering 261 mares, has also enjoyed a stellar season and could be in line for a fee increase after standing for $38,500, a fee which has fluctuate since he retired to stud in 2012 at a fee of $66,000.
Last season’s champion two-year-old Farnan (Not A Single Doubt) is likely to be the pin-up first season sire when he retires to Kia Ora Stud at Scone later this year, the first Golden Slipper (Gr 1, 1200m) winner to retire to stud since Capitalist in 2017.
The stallion will be Kia Ora’s banner horse as it relaunches its Hunter Valley stallion arm and is assured of strong support given his pedigree and race record. Capitalist was launched at a fee of $55,000 as did 2015 Slipper winner Vancouver (Medaglia D’Oro) when he retired to Coolmore in 2016.
Vinery Stud will also launch the stud career of Ole Kirk (Written Tycoon) this year, but as yet, a fee has not been announced.
The colt won the Golden Rose Stakes (Gr 1, 1400m) and Caulfield Guineas (Gr 1, 1600m) last spring, two races The Autumn Sun (Redoute’s Choice) won in 2018 before retiring to stud at a fee of $77,000.
The Autumn Sun also had the J J Atkins Plate (Gr 1, 1600m) on his CV as a two-year-old while he also won the Randwick Guineas (Gr 1, 1600m) and Rosehill Guineas (Gr 1, 2000m) as an autumn three-year-old before retiring to Arrowfield Stud.
Blue Diamond Stakes (Gr 1, 1200m) winner Tagaloa (Lord Kanaloa) will also retire to Yulong in Victoria later this year as the farm’s biggest recruit to date as it enters its third year as a stallion operation.
King’s Legacy (Redoute’s Choice), a dual Group 1-winning two-year-old with a pedigree to match, will also be an interesting proposition when his fee is announced by Coolmore.
Things did not go to plan for the Sires’ Produce Stakes (Gr 1, 1400m) winner in the spring and he will be out to put his name back at the forefront of breeders looking for first season stallion options, often considered by commercial breeders as a “safe bet” if suitable proven sires are out of reach.
The flow on effect of the yearling market will be to the breeding stock sales, such as the Inglis Chairman’s Sale and Magic Millions National Broodmare Sale, both of which are to be held in May.
“The better commercial breeders are starting to trim up their broodmare bands somewhat and trying to get better mares, which keeps the price of those good mares up as well,” Gilbert continued.
“It is a bit of a spinning wheel. The top end looks after itself and the rest you need some luck.
“You can find the mares, it’s just whether you can find them at the price that a seller and a buyer can agree on. For me, running a commercial business where we’re trying to be profitable, it is just not a fact of buying horses to have a trophy in the paddock. It’s buying horses to pay their way and make the farm profitable.”
Gilbert also invests in stallions and Snitzel has been a great money spinner for Highgrove Stud over a number of years, while he also holds shares in Brutal (O’Reilly) and breeding rights in Microphone (Exceed And Excel) and Pierata (Pierro).
“I have got a few irons in the fire as far as stallions go, but I do tend to like doing matings by what I see on the pedigree pages, rather than using those horses for the sake of using them,” he said.
“Snitzel at Arrowfield has been a fabulous horse to us over lots of years. I like having the shares even though with the price of colts now, it’s made the shares very expensive. Where it once was, you could be trading out after the fourth year, but you’re a lot further in these days, so it is not as lucrative as it used to be.
“The horse definitely has to kick up for you to actually make money. If the horse doesn’t, you’re not even breaking square for a lot of years.”