Buyer demand fails to up with surge in supply

Goffs: the Orby Sale was protected but the Sportsman's Sale suffered

PICTURE: Patrick McCann Buyer demand fails to up with surge in supply By Martin Stevens 12:54PM 2 OCT 2016

AUCTION house end-of-sale statements are often full of bluster but the one Goffs issued at the end of its Sportsman's Sale on Friday contained a disconcertingly honest line that ought to make breeders sit up and take notice.

Recognising the increased number of young horses on the ground has led to falling clearance rates in the middle to lower market, the company's chief executive Henry Beeby said: "We exist to create a market place for those who choose our sales but cannot necessarily source the numbers of buyers required to service a growing foal crop."

Goffs, Irish Thoroughbred Marketing and agents could hardly be faulted for not already doing their best to attract buyers – see the more than 60 lots sold to Chinese clients at the Sportsman's Sale this week – yet their efforts are still unable to keep up with the increased flow of horses coming onto the market.

So how off-kilter were supply and demand at Goffs this week?

As at all the British and Irish yearling sales this year, if you were a vendor with a horse deemed to be a leading light, you were all right.

Results at the select Orby Sale were marginally better than last year's buoyant edition, with increases in average across all sectors of the market. Even trade in the lowest quartile – generated by placing all prices in value order and splitting into four equal sections – was up, demonstrating there is still strong competition for those lots with the best credentials and that Goffs is a worthy arena in which to sell them.

The clearance rate remained unchanged from last year at 85 per cent despite a small increase in the number of horses offered.

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Goffs protected its Orby brand by placing the bulk of the increased number of yearlings in its less select Sportsman's Sale, which took place immediately after its more prestigious counterpart.

The Sportsman's catalogue almost doubled in size from 2015 and was extended from one day to two, split into Part 1 and Part 2. Almost inevitably, demand from buyers failed to keep pace with the surge in supply.

While the number of horses offered under the Sportsman's banner was up by 98 per cent, the amount sold rose by only 65 per cent. Hence the clearance rate fell to 75 per cent from a very healthy 90 per cent in 2015.

Sportsman's vendors generally also received less for their stock than last year, with decreases in average prices across all levels of the market and becoming more severe the further down you went.

The extent of overproduction is shown by combining results at all of this year's British and Irish yearling sales – Goffs UK Premier and Silver, Tattersalls Ireland Parts I and II, and Goffs Orby and Sportsman's.

At those six auctions, 2,442 horses have gone under the hammer and 1,914 have changed hands for a clearance rate of 78 per cent. Last year, 1,908 had been offered and 1,676 sold, or 88 per cent.

Put another way, there are 528 unsold sales yearlings on the ground, more than double the 232 at the same stage of the auction season in 2015.

Kudos to Goffs for its candour in addressing the problem of supply outstripping demand. Commercial breeders should apply similar honesty when deciding next year whether their mares are capable of producing a foal that the market really wants.

AVERAGE PRICE PER QUARTILE

Goffs Orby

Quartile 1: €25,111 (+3% from 2015)
Q2: €51,400 (+6%)
Q3: €87,978 (+4%)
Q4: €267,556 (+3%)

Goffs Sportsman's

Q1: €4,548 (-38%)
Q2: €9,392 (-35%)
Q3: €15,779 (-35%)
Q4: €35,941 (-27%)

    Read More at Racing Post Bloodstock

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