Successful Appeal (Valid Appeal) ($17,500) is the king of value in this category. He has consistently produced a high percentage of stake winners (over 7%) and has one of the highest average earning index of sires in the price range (1.91). He has not traditionally been extraordinary in the sales ring. However, his numbers are solid enough that there is very little downside from breeding to him at these levels.

Exchange Rate (Danzig) ($25,000) gets an incredible 7% stake winners from foals and a very high Average Earning Index 1.78. His best foals are just starting to hit the track, as we begin to see the result from his move to Kentucky. The higher priced mares he has been bred to means that the best from Exchange Rate may still be to come.

Candy Ride (Ride the Rails) ($25,000) Has been explosive out of the gate showing right off the bat that he is able to sire top class runners with no less than five graded stakes winners last year. He is a high percentage producer that can boast a 2.25 AEI. He gets a much warranted price hike but we still say that he is worth every penny. Breeders must be mindful of not breeding mares that have small feet or that are prone to hoof problems.

Not for Love (Mr. Prospector) ($25,000) A giant in the regional market. Not for Love produces an astonishingly high percentage of stake winners (9%). He is as solid as they come and is able to produce top runners in any market as shown by his three graded stakes performers last year. If you are in the Mid Atlantic area, this is the horse to breed.

Worst Values:

Perfect Soul (Saddler’s Wells) ($15,000) Has not really been able to take off as a sire. The good looking son of Saddler’s Wells only produced 2 stake winners last year. Although we do expect his progeny to do better with age and on the grass, his numbers are too low to warrant the price tag, a deeper discount would be required for breeders to continue supporting him.

Today we will analyze the group of stallions that stand between $30,000 and $50,000.

Best Values

Lemon Drop Kid (Kingmambo) ($35,000): As consistent as they come, Lemon Drop Kid produces a very high percentage of stake winners from foals of racing age (11.4%). He is the classic type of undervalued sire that posts good numbers year after year yet remains well priced for the quality he offers. I will not be surprised to see his fee increase in the next few years.

Lemon Drop Kid reminds me a lot of horses like Dynaformer or Smart Strike who offered very good value to breeders until they were ‘discovered’ by the high end breeders and commercial buyers. I believe that Lemon Drop Kid is in the cusp of taking a similar jump. Especially for the breeder who breeds to race, there does not seem to be a better value than this horse.

Tapit (Pulpit) ($50,000): Tapit has gotten off to a flying start and has proven he can get both quality and precocity. He has been most successful with his fillies siring the likes of Careless Jewel, Stardom Bound and Tapitsfly. In fact, given that his five highest earners in North America are all fillies it is amazing that Tapit can boasts a 2.88 AEI especially because fillies usually have lower earnings potential than their male counterparts. However, this does not mean that he is purely a filly sire; he already sired Testa Matta in Japan who won the Japan Dirt Derby.

In addition, these numbers were achieved on a low stud fee and Tapit is able to give an incredible boost to his mares (1.51 CI). The best should be yet to come as the quality of mares bred to him increases. I believe that Tapit still has a lot of upside potential even at this price. All that he is missing is to sire a top class colt to break out of his “filly sire” reputation.

Henry the Navigator (Kingmambo) ($40,000): It is hard to remember every having a sire with as much class as Henry the Navigator standing for this low a price. Add to that extreme good looks and perfect balance and you have one of the best values in the market today.

A precocious 2 year-old, Henry the Navigator was a top class miller at age 3, winning both the English and Irish 2000 Guineas, the Sussex Stakes and the St James Place Stakes, all of them at a mile and all of them Group 1. He was named champion 3year old colt in Ireland and finished second to Raven’s Pass in the Breeder’s Cup Classic.

Standing only his second season at stud his yearlings should be attractive to both European and local horsemen. If you would like to take a shot on Henry the Navigator, now is the time to breed to him.

Worst Value:

Stormy Atlantic (Storm Cat) ($35,000): Another horse with a high price tag despite low AEI (1.58), he produces very good horses but it is difficult to get exited about his price tag. He is a better value in the $20,000 level and we expect to see him in that range in the near future.

Best and Worst Values in the Stallion Market for 2010

The year 2009 will go down as one of the worst years for thoroughbred breeders. We have seen major financial market indicators fall to levels not seen in a decade. Virtually every sale worldwide had substantial reductions in average, median and gross. In response to this drop in the market, stallion owners have been quick to reduce fees for their stallions.

The question that remains in most breeders minds is: Have stud fees been reduced enough?

This is not an easy question to answer with so much uncertainty in the bloodstock market. Breeders need to make decisions now about products that will be sold two years from now and there has never been more uncertainty as to where the market will be at that point in time. Therefore, it is more crucial than ever to find value among the sire offerings in order to best protect against potential future downturns.

Stallions Standing for Over $50,000

What does Storm Cat, Gone West, Seeking the Gold, El Prado, Cozzene, Theatrical, Rahy, Red Ransom and Silver Deputy have in common? They are all first rate sires that have been pensioned or lost in the past few years.

The American thoroughbred market is going through an interesting transition currently as some of the old and venerable ‘Book 1’ sires pass the torch to a new generation of sires that will try to step up to take their place. But are they up to the task? Can the new generation justify the high stud fees and maintain the high yearling prices or will the top of the market be reduced to more ‘affordable’ levels?

In the “Over $50,000” Category we will recommend breeding to the proven sires that have showed that they belong in the highest echelon of the thoroughbred world. We will try to avoid the new ‘hot’ of the moment sires that may not have the staying power to maintain the high stud fees.

Our Best Values are:

AP Indy ($150,000): with a 3.14 AEI and whopping 12% stake winners from foals, AP Indy ranks as the best value for breeders with the right mares. No other sire will dominate the thoroughbred market as much as he will in the years to come. Although age and fertility may be a concern, breeders with young quality mares are well advised to take a shot with AP Indy before it is too late. Also, Lane’s End is offering a 10% discount for breeders that pay on November 1 of year bred, a very tempting offer to further the appeal of this sire.

Distorted Humor ($100,000): Another proven horse able to get a very high number of stake winners from foals with 9%. He is a consistent and produces good looking foals able to shine on the racetrack and at the sales ring. Considering he stood for as much as $300,000 not too long ago, the $100,000 is certainly worth the money.

Pulpit ($60,000): Pulpit is already a proven sire of sires with Tapit out to a very strong start. He is an extraordinary looking individual capable of getting a top sale yearling and consistently strong runners. His sales median of $150,000 warrants an investment at this level for the commercial breeder and a strong 7% stake winners from foals is very attractive for those looking for racing performance. At $60,000 he is very well priced.

Worst Values:

Difficult to call any sire in the category a bad value since virtually all of them have showed that they are able to sire stock in the highest categories. However, there are a few that down the road may not prove to be very sound investments at these levels.

Medaglia D’Oro ($100,000) I have nothing against Medaglia D’Oro, in fact I think he is a very capable sire and he has already proven that he can sire top quality stock with three grade 1 winners last year including the great Rachel Alexandra. However, I think that Darley may have been too hasty to raise the fee so high. Perhaps they overpaid for him as a sire when they purchased him last year as the thoroughbred market was sinking but that is no reason to have breeders pay for it.

The fee raise (from $60,000) represents one of the largest fee increases recorded in the market, at a time when most fees were dropping. True Medaglia has been the ‘hot’ sire this year. But what will be of him in two years, long after Rachel Alexandra has been retired, if he fails to produce anything of consequence next year? With only 4% stake winners from foals (5.3% if you take out the current two year-old crop) it is hard to justify the hefty stud fee.

Mr. Greeley ($50,000) has had a good run at the sales ring and the race track as European owners and breeders flocked to purchase his progeny at the sales ring. Even with him producing the likes of Kensei, his 1.46 AEI and meager 4% stake winners from foals make his a very questionable deal even at this level.

Real Merchant (Chi), owned in part by Warstone Farm, will try to recover from an eighth place finish in the Suburban Handicap G2 this Sunday in the $100,000 Majestic Prince Stakes at Monmouth in the Haskell Undercard.

Real Merchant (Chi) will break from post 6 of 7 in a competitive field that includes Chirac, who has won three in a row; multiple stake winner Acting Zippy and G3 winner Acting Good among others. Johnny Velzquez will be up for the mount on the Seth Benzel trainee.

The horse has had two very solid half mile workouts since the Suburban and is looking “tremendous” according to trainer Seth Benzel. It is worth noting that Gold Trippi, a horse that Real Merchant beat by 2 length in an Allowance race at Belmont came back on Wednesday to take a stake at Saratoga.

Warstone Farm has purchased 50% of multiple stake winner and graded stake placed Chilian runner Real Merchant (Chi). Real Merchant (Chi) disappointed in his latest effort in the Suburban Handicap (G2) which was eventually won by Dry Martini and was purchased after that race.

Real Merchant (Chi) was a multiple stake winner in his native Chile. Since his arrival in the United States, Real Merchant (Chi) placed third in the Alysheba Stakes at the Meadowlands and second in the Stymie Handicap at Aqueduct before placing second in the Grade 3 William Donald Schaefer Stakes on the Preakness undercard. He also recorded a triple digit Beyer and a Rag # of 1 while finishing second in an Allowance race at Belmont.

Real Merchant (Chi) is by leading Chilean Sire Merchant of Venice a multiple graded stake producer and winning son of Storm Cat. His dam is the Seeking the Gold mare Really Seeking from the familly of Grade 1 winner Ballistic (Chi). However, the best feature of Real Merchant (Chi) is without a doubt his looks, he is one of the best looking horses we have ever owned and Real Merchant is one of the best physical individuals out there.

Real Merchant (Chi) is being trained by Seth Benzel at Saratoga and should be running again soon.

Kentucky is the capital of thoroughbred racehorse breeding for good reason. Breeders in Kentucky enjoy having the best and largest selection of sires to chose from, access to some of the best land to raise horses in the world and ready access to the best racehorse sales in the world. For these reasons most major breeders have set up headquarters in the bluegrass state and have invested millions of dollars in bloodstock and infrastructure.

Through the years many states have developed important regional breeding programs to attract investment in their industry. Many of these programs offer incentives to stallion owners and breeders that provide income every time a horse they bred runs well in a race within that state. Therefore breeders are not completely dependent on the price a horse fetches in the auction ring to make a profit but may continue to receive income throughout a horse’s career.

There are other benefits for breeders who breed in regional programs. First, the horses that they breed are eligible to race in softer restricted races which usually carry high purses. These races provide breeders with greater opportunities for their stock to make money throughout their careers which translates to higher income for the breeder. Second, state bred restricted stakes races also increase the chances that a given foal will become a stakes horse which increases the value of their sires and dams. Third, regional breeders may be able to negotiate cheaper fees for Kentucky stallions. Some farms are now even offering free breeding rights in exchange for being listed as a co-breeder of the resulting foal and thus becoming eligible to receive the state bred incentives.

During the times when auction markets were strong, these additional incentives were not particularly attractive to many national breeders. They were content to breed the best they had to the best they could afford and hope that the auction market would reward them for their efforts. However, in a severely declining auction market these breeders would be wise to revise their strategy and look to regional markets to improve their odds of making money in the long run.

Breeding in regional markets would reduce their cost of production since they would be able to negotiate cheaper stud fees and increase the amount of money they can get out of the resulting foals since they would no longer be dependent on making a good sale in the auction ring.

In this economic downturn it is very important for breeders to select stallions very carefully. One of the best places to invest, if you are breeding to sell, is to invest in a first year stallion. However, breeders must be very selective if they want to optimize the chances that the resulting foal will be profitable in the sale ring. In addition, breeders should also select a sire that will give them the best possibilities that the resulting foal will be able to run since there is a probability that the breeder may end up owning the foal if the reserve is not met by the market.

With this in mind we have the following recommendations to make to breeders regarding this crop’s freshman sires:

Under $10,000:

Indygo Shiner (A.P. Indy) ($7,500): He absolutely represents the best value of any new stallion and perhaps of any stallion offered. He has an impeccable pedigree being by AP Indy out of a full sister to Toussaud, one of the best broodmares of recent history and dam of the likes of Empire Maker and Chester House. In addition, he is a superb looking individual from a physical standpoint able to sire very marketable and extraordinary looking foals.

He has already covered a couple of southern hemisphere seasons. With those two crops he managed to sire the Argentine Derby and the Argentine Oaks winner in the same year. His son, Tecla Shiner, captured the Nacional-Argentine Derby (Arg-I), and his daughter, Miss March, won the Seleccion-Argentine Oaks (Arg-I) and another of his sons Mi Amiguito also won the Argentine 2,000 Guineas. This is no small feat by any measure.

I don’t think there is a better value being offered anywhere and I cannot stress enough the quality of his progeny in Argentina. He has a pedigree that is well suited to the American market and at I think that this horse will very quickly climb in stud fee value in the coming years.

Under $25,000

First Defense (Unbridled Song) ($17,500): By Unbridled Song and out of the incredibly racer Honest Lady by Seattle Slew, First Defense is looking like a horse that is being offered for fantastic value. His female family includes the likes of Empire Maker and Chesterhouse since Honest Lady is also by the great broodmare Toussaud.
He was a G1 winner at 7 furlongs, probably his most effective distance, he possessed great speed and power and good physical qualities.

Seeking the Dia (Storm Cat) ($10,000): Another top value sire by Vinery. Seeking the Dia was very much the real deal on the racetrack. He banked over $5 Million dollars and won some of Japan’s most prestigious dirt races, he also placed second twice in the Japan Cup Dirt G1. He comes from a solid female family; he is by G1 Winner Seeking the Pearl. When you look at horses like Bluegrass Cat who command a stud fee of $40,000. Here is another son of Storm Cat who was just as good, if not better on the racetrack for a fraction of the cost.

J Be K (Silver Deputy) ($10,000): From the same sire that gave us the champion freshman sire Posse. J be K began his career in impressive fashion setting a track record at Saratoga at 2, for that alone he is worth the price. He still returned the following year to win 3 graded stakes at 6 and 7 furlongs. A top prospect with plenty of upside if you can get over his unfortunate name.

Over $25,000

Henry the Navigator (Kingmambo)($65,000): The English 2,000 Guiness winner trained on very well to win 4 consecutive Group 1 events and finishing second in the Breeders Cup Classic. He is impeccably bred being by Kingmambo out of the Saddlers Wells mare, Sequoyah. This Great physical specimen has very little down side at this price. Consider that Giant’s Causeway, who has similar credentials, stood for $125,000 in his first season.

Curlin (Smart Strike)($75,000): Curlin was really: the horse of the world. He is a much more recognized name on an international scale than Big Brown and was a sounder more durable individual, which is why we are picking him here instead of that one. He has a more attractive pedigree and I think that he is a much better physical individual. Considering that over the last few years the top horses have stood for over $100,000 including Ghostzapper at $200,000. Curlin at $75,000 definitely seems like a real bargain for the right type of mare. There is a lot of upside for him at this price and we believe that a high percentage of his foals will be profitable for breeders.

Its sale season again! It has been a very unpredictable year that has so far shown mixed results for yearling sales. For example, at the FT Saratoga Select the market was up slightly but FT KY JUL saw the market decline substantially (over 10%).

The high volatility that has been present in past sales probably means that there will be plenty of bargains to be had in the upcoming king of sales: The Keeneland September Yearling Sale. This will be especially true of the middle market.

We anticipate the top of the market to be healthy, although buyers will be much more selective in determining what constitutes the top. This will open up the access to very good pedigrees for buyers in the high-middle level. These types of buyers should be doing their homework in books one and two so that when the opportunity presents itself they can take advantage of it.

I also anticipate the middle market to show a reasonable but not drastic correction when compared to last year; this is based on the fact that pinhookers did reasonably well and will come back with money to invest. In addition, the new tax rules will also allow buyers to reach a little deeper into their pockets for the prospects that they like.

In addition, there will be a great deal of volatility within that middle group, as purchasers that depend on the stock market and/or receive bonus based compensation tighten their spending due to uncertainty in the market place.

Smart buyers should be patient and look for bargains that will be more readily available than in the past.

We will now examine the profiles of some stallions that may offer value for yearling buyers at this sale:

High End Sires:

Pulpit (AP Indy): This guy does well at the racetrack, his average of $100,000 is very low for the bang that he can deliver (AEI 2.12). With some of his sons retiring to stud, this beautiful looking stallion is a prime candidate to skyrocket in price in the near future.

Rahy (Blushing Groom): Perennially undervalued. His average of $66,000 is less than half of his current stud fee. He has an AEI of 2.41. He has 15 selling and everyone of them should be worth a look for bargain hunters.

Silver Deputy (Deputy Minister): is AEI is a strong 2.00 but his average of only $62,500 is very low. Pinhookers take note that his average for 2yo is $190,000. A healthy difference for those wanting to make a quick profit.

Cozene (Caro): Another of the great turf sires he can give you a 2.35 AEI with a very cheap $60,000 average. Probably the best value among the old-timers.

Theatrical (Nureyev): Like Rahy he boasts a 2.40 AEI but his sale figure of $70,000 is very low. For the turf enthusiast this stallion can deliver very high quality for a very good price.

The rest:

Arch (Kris S.): Has come a long way but we believe that he still has plenty of upside even at the $50,000 he average last year. He has been able to get an AEI of 1.95 but the yearlings he is selling today are out of much better mares.

City Zip (Carson City): moved from New York to Kentucky after showing plenty of potential. His $16,073 average will certainly rise but probably not enough to erase the value that he offers (1.81 AEI)

Dehere (Deputy Minister): Just getting back State side will offer his 28 yearlings since getting back. Many may have forgotten how good he is. (AEI 1.81)

Exchange Rate (Danzig): How much does this guy have to do to be appreciated? With an AEI of 1.98 and an average last year of $23,000 he is an absolute steal.

Macho Uno (Holy Bull): Is quickly demonstrating that he belongs in the upper echelon with an AEI of 2.38 and an average of only $20,000 he is probably the best value of the bunch.

Pleasant Tap (Pleasant Colony): They don’t come more consistent than this guy with an average of just $30,000 he always delivers (AEI 1.94).

Point Given (Thunder Gulch): He got a bad reputation with his first two year-olds and was labeled a flop. The two-year olds went on to run big but the label stuck and now his average is just $22,000 but his AEI is an incredible 2.16!

Proud Citizen (Gone West): will probably go up in value due to his recent success at the racetrack but at $35,000 he will still be buyable.

Victory Gallop (Cryptoclearance): Remember him? Easy to forget but as consistent as they come with an average of $10,000 he will surely be one of the best buys out there.

But the very best value you will find in the sale is:

Bad Nicks for Young (but not freshman) Stallions: Nicks are quickly becoming the end all be all for Breeders. Agents may be afraid to purchase a ‘bad’ nick for a client and be branded as someone who does not know what they are doing. However, regardless of whether you ‘believe’ in them of not (and I certainly don’t) most people will agree that the Nicks awarded to young stallions based on what their sires have done are worthless. So take out your guides and look for those Ds and Fs on nicks for young stallions (I would do it for every stallion) odds are that the misguided rating will scare some prospective purchasers giving plenty of value.

I have witnessed great horses that have tried and failed to become the next Triple Crown winner; horses like Smarty Jones, Funny Side, Charismatic, Real Quiet and Silver Charm.

With each of these horses there was always a general sense of excitement going into the Belmont and a general hope that they would become the 12th Triple Crown winner. Those horses were good; they were challenged and they were surrounded by great connections. This year that excitement is generally lacking; many people harbor a deep buried hope for Big Brown to fail. That hope is based on many factors that have affected Big Brown’s popularity:

Eight Bells’s Breakdown: The fact that Eight Bells became the first horse ever to break down at the Kentucky Derby drew most of the media and public attention away from Big Brown and his victory and turned it against the sport itself.

His Trainer: He is trained by Richard Dutrow Jr., a confessed drug and gambling addict with a long history of suspensions and drug infractions that has only served to cast a deep shadow of doubt over Big Brown’s accomplishments.

The Weak Opposition: He has faced a very mediocre group of three year-olds – which has many doubting whether he deserves to earn a title that has eluded so many great horses that met better foes.

In fact, the group that he has faced is so bad that only one of his rivals has managed to run a triple digit Beyer speed figure against him in a Triple Crown race – pathetic! He ran an average Beyer in the Derby of 109 but then he posted the second slowest winning Beyer ever for the Preakness – about 5 lengths slower than the average.

And the group does not seem to be getting any tougher for the Belmont. The only worthwhile addition seems to be Casino Drive, a talented colt without any type of foundation who will be making only his third lifetime start in the grueling mile and a half race – Hardly the recipe for an upset!

His Owners: A new and almost faceless, ambitious, Wall Street type hedge fund who would like to see the sport transformed and have horses become nothing more than a line item in someone’s earnings report.

They would like to have investors, preferably institutional investors, put up tens of millions of dollars into a fund that buys and sells racehorses. The investors would not own or identify with any particular horse but would only be advised of their profits, or most likely their losses.

Under their plan horses would not be owned by people that care about their health and welfare but rather by people whose sole aim it to exploit them for profit. This is a monstrous idea! It takes away any incentive to look out for long term interest of the horse.

His Career Span or Lack Thereof: There is absolutely no chance that Big Brown will run as a four year-old especially considering his ownership group who cares about nothing but dollars and cents.

It is also very unlikely that he will ever meet older foes or even race past the Belmont because the risk of defeat may diminish his value. This horse is headed to retirement as soon as the slightest plausible excuse presents itself (read bruised feet).

His Name: Lets face it when compared to the likes of Secretariat, Citation and Affirmed; Big Brown just has a dumb name.

At the end of the day, Big Brown has nothing going for him other than Big Brown. He is a very good horse and nothing that I have described so far is Big Brown’s fault.

He, as a racehorse, has done nothing wrong on or off the track. He has met every challenge thrown at him, including winning in his first few starts the Florida Derby and Kentucky Derby from a difficult outside post while running wide on both turns. He won the Preakness with great ease and was not at all extended at the finish – he did what he needed to do to stay fresh for the Belmont. And come June 7, he most likely will destroy yet another severely overmatched field and be crowned the 12th Triple Crown winner.

The question is how would you feel about that?

Owner Rick Porter raised more than a few eyebrows when he announced that Eight Bells, a probable favorite for the Kentucky Oaks, may actually run in the Derby. The outrage surrounding the decision had nothing to do with running a filly in the premier horse race in America but rather on the concern that Eight Bells would be entered only to end up running in the Oaks.

Under current rules, only 20 horses can be entered for the Derby. However, nothing prohibits an owner from entering a filly in both the Derby and the Oaks. The problem is that if the filly ends up running in the Oaks, she will have denied another legitimate contender a place in the Derby.

Rick Porter has been unapologetic about his decision stating that in his view there is nothing “illegal or unsportsmanlike” about entering the filly in both races; he notes that “this is a business and not just a sport.” His decision will be controversial only if Eight Bells draws a bad post position for the Derby and scratches.

What will not be controversial is the ability of this filly to compete with the best colts of her generation. Her top Beyer speed figure, a 99, makes her on paper a strong contender. It is also very positive that she has already shown a liking for the dirt and with nine lifetime starts, four of those in the current year, Eight Bells is already a very experienced performer.

One issue against may be that only three fillies have ever managed to win the Derby. Regret in 1915, Genuine Risk in 1980 and Winning Colors in 1988. However, only 38 fillies have ever raced in the Derby, the latest being Excellent Meeting who finished fifth and Three Ring who finished 19th in 1999.

Three out of 38 is not a bad statistic for the Derby. Fillies are winning at a healthy rate of 8%; which means that according to the numbers; theoretically, a filly has a better chance of winning the race than a horse trained by Todd Pletcher who is 0 for 19!

In conclusion, Eight Bells is a strong contender especially considering all the question marks surrounding much of the field and as Rags to Riches proved last year, the girls can beat the boys even at the top of the sport.