Fact Of The Week: Risks and Rewards

By John Boyce

If the quantity of money spent at the yearling sales is the key motivator for continued investment by European commercial breeders, then they’d have to be very positive with the way the market has progressed over the past 10 years. As recent as seven years ago the average return on all horses offered as yearlings at public auction in Europe was £20,330. Within four years, that return had risen by 47% to £38,282.

There are not many industries that can claim to have witnessed such phenomenal growth in the same period. Even the world’s major stock markets–forever advancing–fall well short of what the Thoroughbred yearling market has achieved. Commercial yearling productions fell away to about 7,000 in 2011, but topped 9,000 again in 2015. But a significant increase in the supply of sales yearlings has failed to dampen demand, so far. Will 2017 take us far beyond the 9,000 mark?

This year, like every other though, is a whole new ball game. Unlike most other markets, the yearling sales market is so much further away from a state of perfect competition, because its continued growth or even its very stability rests in the hands of so few. No wonder breeders always set out with a great deal of trepidation and take a leap of faith when sending their mares to be covered. Who knows where the market will be in 2 1/2 years’ time. Take heart, though; the numbers are certainly going in the right direction.

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