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New Zealand Bloodstock – a victim of its own success

25/11/2016

New Zealand Bloodstock – a victim of its own success


The record turnout for last week’s New Zealand Bloodstock’s (NZB) Ready to Run Sale at Karaka shows our bloodstock industry is still punching well above its weight says Crowe Horwath’s bloodstock specialist Hayden Dillon. As interest from Australian and Asian buyers continues to grow, the sale saw a record number of entries with 552 horses offered, however, this was tempered by a low clearance rate of 60% compared to the 81% of last year’s record-breaking sale, which left a number of vendors taking their horses back home. Dillon, says “the industry should take comfort that this is not a structural issue for the sale, rather growing pains, and NZB and the vendors will be making adjustments as necessary for the 2017 sale.”

The Ready to Run Sale, held at the famed Karaka Sales Centre, is for two year olds that have “breezed up”, hence the “Ready to Run” tag. It offers buyers a chance to observe the horse in action and they are purchased with much of the work already done. The sale has grown each year with this year having a staggering 150 more horses catalogued than in 2015. The sales brought in $28 million and the average price rose from $92,000 last year to $96,000 this year.

However, the clearance rate dropping by 21% is of concern to the industry. “While the sale is continuing to grow each year, the low clearance rate means a large number of vendors were left taking horses home that they have invested a lot of money into preparing them for this sale. Dillon continues, “while the low clearance rate does not reflect the strength of the industry, it does mean vendors whose horses did not sell are entering a tough period after seeing no return from a significant investment.”

Dillon believes the low clearance rate could, ironically, be attributed to NZB and the NZ breeding industry being a victim of their own success. “Vendors took confidence from the 2015 Ready to Run Sale and the strong yearling sales alongside the overall performance of the NZ thoroughbred in Australia and Asia. Even though the 2016 sale sold 40 more horses than in 2015, the increases in catalogued horses offered at two-year-old sales in Australasia (369 more horses than last year) led to the poor clearance result,” Dillon expands.

The industry will now move its focus towards the National Yearling Sales in January and February next year. Dillon does not predict the result of the Ready to Run Sale will have a significant effect on the Yearling Sales. “New Zealand thoroughbreds are still performing strongly, winning 25% of all Group 1 races in Australia last season when they only made up 5.4% of the Australian horse population. With the New Zealand bloodstock industry contributing to $130 million of exports and $1.3 billon to New Zealand’s gross domestic product, the industry is still continuing to strengthen.

ends

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