Despite some strong individual results at the Magic Millions National Weanling Sale, Burnewang North Pastoral principal Cathy Haines remains concerned by the volume of quality thoroughbreds left on the shelf by buyers this week.
Burnewang North sells its entire crop via the weanling sales and the May-June sales period is vital to the ongoing commercial viability of the Northern Victorian farm.
Burnewang North sold six of its ten-horse draft for six figures sums, including a top lot, the So You Think (NZ) colt purchased by Rothwell Park Thoroughbreds for $200,000, which was the first foal sold for the week.
But while those prices pleased Haines, it was the fact she will be taking home four well-bred weanlings that tells her the middle of the market is softer than it has been for some time.
Burnewang North sold six of its ten-horse draft for six figures sums on the Gold Coast
"The results were very mixed. We were happy with the upper end of our draft, but disappointed to have to pass horses in. We brought what we thought was a very well-acquainted group of weanlings," Haines told TDN AusNZ.
"We thought they were nice individuals and I think it’s a sad reflection on all manner of aspects of the industry, that you can bring along weanlings by those type of sires and not be able to reach the service fee."
"The middle and upper middle markets in Australia are oversubscribed heading forward into 2020 yearling sales. Things are only going to get more difficult with the burgeoning numbers that the sales companies are offering and the shrinking middle and upper market buyers."
"We were happy with the upper end of our draft, but disappointed to have to pass horses in." - Cathy Haines
The numbers back up Haines' assertion that the increase in weanling numbers is not being met by an increase in numbers on the buying bench.
In 2015, there were 1084 weanlings catalogued across the major three sales in Sydney, Gold Coast and Melbourne. That number has jumped to 1518 in 2019.
The clearance rate at the recent Inglis Australian Sale in Sydney at 84.72%, was the lowest in four years and a full ten percentage points down on 2018. The clearance rate at Gold Coast has fallen even further, to 77.7%, down significantly from last year.
Haines said the additional 170 horses on offer at the Gold Coast, which saw the sale extend to three days, made it even harder to find buyers, especially outside the top 15-20 percent of lots.
"There's too much leg work. I'm sure Magic Millions will look to a Book 1 and Book 2 situation. It’s too much to drag through, certainly for the horses at that age and secondly for the buyers," she said.
The knock-on effect
The knock-on effect, she said, could be on stallion service fees in the coming years, with a large share of commercial breeders struggling to break even on weanling stock.
"I think the stallion masters need to have a long hard look at the increases in prices in the past couple of years, because those increases are far from reflected in anything outside the top 15 to 20 percent of the market," she said. "That leaves 80-85 per cent of market lamenting."
"It’s a very specialised business what we do and I think there has to be some work to be done to continue to have it sustainable at the middle levels, the boutique levels, and the smaller commercial level likes ourselves."
"We had a good sale, in the scheme of things, but we all have to be cognisant of the costs, which are escalating on every level, every time we look sideways."
"I love the business and we will keep on tweaking things so we are thinking ahead rather than backwards. But this is no surprise."
"It’s a very specialised business what we do and I think there has to be some work to be done to continue to have it sustainable at the middle levels." - Cathy Haines
Interestingly, the changes in the landscape have also led to a change in strategy for the likes of Arrowfield, which sold 24 weanlings through the recent Inglis Scone Online Thoroughbred Sale rather than physically through a ring, where there are considerable overheads. Waikato Stud has done a similar thing in New Zealand.
Despite concerns over the market, Haines said Burnewang North are confident in the 12-strong draft it will take to next month's Inglis Great Southern Sale at Oaklands Junction.
"We’ve got a nice even bunch at the Southern Sale. We distributed them in the different sales for different reasons. We’ve got some very nice pedigrees, similar pedigrees for the Melbourne sale," she said.
Transact ready for Cup qualifier
Haines' attention will turn to Flemington on Saturday, where a horse bred by Burnewang, and in whom it retained a small share, Transact (Dundeel {NZ}), contests the Listed Andrew Ramsden S., which is now a ballot free qualifier for the 2019 G1 Melbourne Cup.
Transact with trainer Gai Waterhouse after his win in the Listed VRC St Leger
"He's a bit exciting. I've been a bit busy at the sale, so I haven’t caught up with the latest from the stable, but Gai (Waterhouse) is a fantastic communicator," Haines said.
Transact, trained by Waterhouse and Adrian Bott, is the only 3-year-old in the race and carries in minimum 54kg for jockey Luke Currie, who rode him to victory two starts ago over the same course and distance in the Listed VRC St Leger.
"I would say he's got a good jockey on tomorrow. He's got every chance. We won't be counting chickens, but we will be keeping our fingers crossed for him," she said.
Transact was sold for $220,000 to Waterhouse and Bott at the 2017 Magic Millions Yearling Sale and Burnewang North took the unusual step of staying in the colt.
"It was only a small share but with someone like Gai, who is a long-term colleague and friend, we are delighted to have a little piece," she said.
Transact as a yearling
"We don't so the same thing with the weanlings. Our game is to sell, we keep as few shares as we can, but we did like that particular horse."
Haines' judgement has proven typically sound with Transact a winner of three of his 12 starts and over $220,000 in prizemoney. A win on Saturday would secure his spot in Australia's most famous race in November.
"That is too exciting for words," Haines said. "I'm not ready to think about that yet."
From the first crop of Arrowfield's Dundeel, Transact is out of the imported mare Rap Tale (USA), who Burnewang on-sold last year. Her Dissident yearling filly was sold through Armidale Stud at this year's Magic Millions Tasmanian Yearling Sale for Mystic Journey's (Needs Further) owner Wayne Roser for $30,000.
