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How the Thoroughbred Industry Weathered the Economic Downturn: State of the News

Jacalyn Carafagno covered last month’s yearling sale at Keeneland, and she joined us on Friday’s State of the News to explain that the thoroughbred industry was changed by the poor economy, but not necessarily for the worse. Fewer horses are being bred, which means the lowest quality horses are falling out of the market. Since it takes the same amount of money to care for a mare and foal, this can mean greater a greater return on investment per yearling sold. You can listen to her Keeneland coverage and reflections on it below:

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Keeneland’s Auction Meets Opening Sales Goals

The first million-dollar horse has been sold at Keeneland’s 68th Annual September Yearling Auction.

Mandy Pope of Whisper Hill Farm bought a filly by Unbridled’s Song for $1 million.

The auction attracts international crowds to bid on and purchase yearlings, who are at their peak sale price in September. The 13-day auction has more than 4,300 horses cataloged this year, but that number is less than previous years, said spokeswoman Julia Balog. Demand dialed down in 2008 because of the economy and breeders focused on more desirable horses, she said.

“When the economy changes and people have less money for luxury items such as a race horse then the value of it changes. And so what happens are the best horses continue to be sold and then the less commercially viable ones, just through attrition, are not bred the following year,”  said Balog.

But sales are on par with expectations, despite fewer thoroughbreds catalogued for sale. In the first two days 129 horses have sold for a total of $45 million, she said.

“We’re actually quite pleased, because going into a sale like this we were hopeful that we would be able to maintain about where we were last year and so far we’re able to do that,” said Balog.

The auction’s first two days are a good indicator of how well the auction will go, said Balog.

Keeneland Thoroughbred Racing and Sales holds four auctions throughout the year, but Balog said September’s yearling sale is the bellwether for the thoroughbred industry.

The auction ends on Sept. 23.

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Today on State of the News

With a government shut-down looming and questions about how such a step would affect the average citizen, Phillip M. Bailey joins us to talk about what lawmakers from Kentucky and Indiana have been saying about the budget impasse and what next week could bring. Rick Howlett reports on a snag in plans to re-open Kentucky Kingdom, and Indiana’s defeated smoking bill.

They’ll also fill us in on a controversial proposal that would allow food stamps to be used to purchase fast food from Yum! Brands restaurants. Then we’ll join our colleagues at The Easter Standard, live from Keeneland with a conversation about the future of Kentucky’s racing industry, with the presidents of Keeneland, Turfway, and Churchill Downs.

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Keeneland Yearling Sales Drop Sharply

From Emily Boyer, Kentucky Public Radio/WEKU, Richmond

Thoroughbred sales at Keeneland are feeling the pinch of the poor economy.    

Yearling sales that ended Monday totaled about $190 million, down from last year’s $313 million.  Spokespeson Jim William says Keeneland saw even less revenue because of a reduced commission rate. Williams says normally the rate is the lowest world-wide at 4.5 percent.

“This year we reduced the commission on what we call RNA’s or horses which fail to reach their reserves to two and a half percent. It most certainly helped those consigners that were not able to sell their yearlings,” Williams said.

Just under 5,200 yearlings were registered for this year’s September sale. Williams says about 3,000 were sold. The average sale price was around $60,000.