Racehorse TALK

I'd be wary of a More than Ready yearling out of More Joyous - he is her sire after all...

I might have read it wrong then!

I'll see if I can find the article again for a re-read.

ED

I can't find it, so until I do, I'll take that statement out.

ED

" I'd be wary of a More than Ready yearling out of More Joyous - he is her sire after all.. "

I knew they bred them back pretty close, but not that close.

When it works, it's called LINE BREEDING, when it doesn't it's called INBREEDING.

A horse that can play a banjo would have to worth plenty

I am the first to admit that I know nothing about thoroughbred breeding, pedigrees, or conformation (pointy end of a pin comes to mind!), but what I initially set out to achieve was to identify some of the contributing commercial influences that lead to breeding and/or buying a successful race horse. In this instance, “successful” means winning a race anywhere, and if financial success also ensues, that is a bonus.

I also know I will invite criticism for what follows, as you won’t hear me mention nicks, apex ratings, in-breeding, line-breeding, crosses, or stallion lines. I have simply looked at the publicly available records of yearling sales and the subsequent earnings history of those yearlings as they progress through their racing careers.

For a small number of sires (26 at this stage), I have examined the records of their progeny with a view to fine tuning the selection process for both breeders and buyers in their quest to profit from what appears to be a very risky, but occasionally very rewarding, business venture.

I have not examined broodmares or broodmare sires, but I acknowledge they have a significant part to play in the success of a breeding programme. Nevertheless, with most media articles revolving around the dominance of sires in the breeding process, my first step in the whole exercise has been to look for links between sires and the success of their progeny on the racetrack. I hope to extend my research into broodmares and broodmare sires in the future.

Additionally I accept that any knowledge displayed below has only been acquired recently, and my inexperience will be displayed to you all. I will be very happy for constructive input from those involved in the business of breeding thoroughbreds.

Finally, my interest was also framed around my working career. I am now retired, but I come from the financial services industry, and I like to think I have a fair understanding of the value of money, running a successful small/medium sized business, and the associated financial requirements.

Research

My research began with a question to this forum about where information could be obtained about sires, broodmares, sales results, subsequent earnings etc. A few of you responded (I am very grateful for that input), and sent me off to various websites where information on many aspects of breeding and owning is available.

But it soon became obvious to me that it is almost impossible to find all of those facts and figures in any one place. 

Perhaps the most surprising aspect was that Thoroughbred Breeders Australia (TBA) provided little or no statistical research information on their website at all, only links to other sources. I found this to be astonishing, as I’m sure one of its charters is to encourage people like me to breed and/or buy a racehorse.

What encouragement is there if you can’t get any information from the main breeding association of Australia?

Research through the internet took me to the following websites:

• Australian Stud Book (access by subscription) - studbook.org.au
• Stallions - stallions.com.au
• Bloodhound (subscription) - bloodhound.net.au
• Racing and Sports - racingandsports.com.au
• Breednet – breednet.com.au
• Arion New Zealand (subscription) - arion.co.nz
• Pedigree Query - pedigreequery.com
• Cyberhorse Bloodstock – bloodstock.cyberhorse.com.au

All of them provide good information, some more detailed than others, and some more suitable to breeders than buyers and vice versa.

And in discovering that consistent reliable information was not readily available without visiting a number of websites, I also came to realise there were four industries involved in the breeding and sale process:

1 The Stud (ie where the stallion stands)
2 The Breeder (the owner of the broodmare)
3 The Sales (Magic Millions, Inglis etc)
4 The Buyer (you and me).

As I have no knowledge about the business of standing a sire at stud, or about the sales companies, I have restricted myself to the breeding and buying aspects only.

I hope someone benefits in just a small way from the information that follows.

ED, is that what you have written or is it from an article?

Ed wrote that himself Wily.

A commercial broodmare owner presumably wants to breed and sell the resultant progeny of the mare. Many of the larger studs maintain a sizeable stock of broodmares, but I have assumed a broad assumption that the breeder wants to initially sell the progeny at a profit rather than retain to race or for future breeding purposes.

I realise there are lots of exceptions, particularly with some of the high profile studs such as Emirates, Darley, Coolmore, Strawberry Hill, and Patinack Farm; but in continuing the assumption that the breeder will want to sell the progeny, what should they be looking for in their choice of stallion?

Most quality studs are well maintained, their after-care service for the broodmares is top quality, and the proprietors are assumed to be honest, so it was finally decided that commercial breeders want four things from a chosen stud:

1 An established, good quality sire at
2 A service fee that reflects
3 A good chance of a healthy, saleable foal, and therefore
4 A successful (ie profitable) sale

Can these factors be quantitatively measured?

This question led into a range of areas that have probably never really been appreciated by most lovers of racing. All of a sudden it became necessary to look at sire fertility rates, live foal ratios, named progeny ratios, yearling sales statistics, runners to live foals, winners to live foals, sale prices against service fees paid, earnings against sale prices, successes in group races, and so it continued.

There were several other factors examined, and other more knowledgeable people will no doubt have their own favourites; but not everything could be included, and eventually some value judgements were made to decide on what factors were regarded as most important to a breeder from a commercial view. I finally included the following factors, some of which overlap:

• The ratio of yearlings sold to live foals (indicating healthy foals)
• The ratio of sale price to service fee (commerciality of sire)
• The clearance rate at sales (commerciality of sire)
• The ratio of runners to live foals (indicating healthy foals)
• The ratio of winners to live foals (indicating quality of sire)
• The ratio of earnings to sale price (indicating potential financial return)
• Success in group races (quality of sire)

It was decided not to include fertility rate as a major factor in selecting a sire. With most studs now offering a “free return” for unsuccessful matings, I came to the view that this would largely offset the need for a highly fertile sire.

From a stud perspective, it is not particularly desirable to maintain a sire with low fertility, but from a breeders’ view, the important point is that the mare gets “in foal”, be it first or subsequent attempt. I acknowledge that a “miss” may cause a delay of 12 months for the broodmare to return to the sire, so there may be a financial penalty.

From the following brief sample, it is clear that some sires appear to have a higher fertility rate than others.

Strategic has an average fertility rate of 90% (over 12 years) whereas Exceed and Excel averages 78.5% (over 5 years). Encosta de Lago has 86% (12 years) while Redoute’s Choice is 85% (9 years) and Testa Rossa 80% (8 years). But all offer a “free return” (with conditions).

After a foal is born, it should be every breeder’s wish that it remains healthy enough to be sold profitably at a public sale, then to continue remaining healthy so as to show enough promise to be named (ie become “named produce”), and then to actually start in a race.

Additionally, if an owner is fortunate enough to get his purchase to the racetrack, he then wants a high chance of actually winning a race (anywhere), so a high ratio of runners to live foals and winners to live foals is desirable for the breeder.

All of these factors can be measured, and some of the figures are surprising for well-known sires.

What is also surprising is the percentage of yearlings offered at public sales against the number of live foals produced. The figures vary widely and it is puzzling as to why this is the case.

For example, on average 85% of Flying Spur “live foals” are offered at the major sales whilst Bel Esprit is 64%, and Lonhro is around 50%.

But the percentage of “Named Produce” to “Live Foals” is 90%, 74%, and 72% respectively.

This indicates that 5% of Flying Spur live foals, 10% of Bel Esprit live foals, and 22% of Lonhro live foals must have been sold privately or retained by the breeder. Similarly, the differentials are 16% for Encosta de Lago, 6% for Redoute’s Choice, and 15% for Testa Rossa.

The reasons can be canvassed widely (I am open to suggestions), but could include the maturity of the foals (ie immature at time of public sale), minor injuries that might detract from sale, retention by the breeder for future racing or future breeding, poor conformation, and private sales to friends/relatives etc.

Nevertheless, I formed the view that if a breeder is truly in the business of selling progeny for a profit, a low “offered to live foals” percentage is more likely to relate to immaturity, poor conformation, or minor injury.

The average clearance rate of progeny offered at the public sales also throws up some surprises. Flying Spur has a clearance rate of 76% whilst Bel Esprit is 66%, and Lonhro is 71%. Encosta de Lago is 77%, Redoute’s Choice is 72% and Testa Rossa is 73%.

Once again, there may be a number of reasons for these variations, including unrealistic reserve prices, conformation irregularities in young progeny, indications of immaturity etc.

Statistical considerations

All of the above information complicated the methodology in measuring the overall success rates for particular sires. With some breeders not offering their produce at sales, and some sires’ progeny not reaching the track at all, the only consistent way to measure success appeared to be by using “live foals” as the baseline rather than “named produce” or “individual runners”.

Another complication was the measuring period. To avoid any confusion between a racing year (1st August to 31st July) and a calendar year (1st January to 31st December), it was decided to use a sire’s “crop” as the standard. This simply means that sire figures relate to a breeding season (normally August to November each year for southern hemisphere).

Winners, runners, and earnings ratios are therefore measured by crop rather than racing year, and this makes it easier to highlight successes that might only have come from just one or two progeny rather than a consistent spread.

The logic behind this is illustrated through the sire Bel Esprit, where his champion progeny Black Caviar would skew his stud performance if based on the earnings of progeny alone.

So to summarise, all individual sire information has been converted to a “per live foal” basis and “per crop” for overall consistency.

But as anyone with a modest knowledge of statistics (and politics!) will know, statistics can be used to “massage” the truth (lies, damned lies, and statistics), and in this document, have been used as indicators only. “Averages” can easily fit into that “massage” area, and using them as a measure of sales success can sometimes hide the truth that a high average has only come from inflated prices of a small number of yearlings.

To try to eliminate this skewing of prices, it was decided (subject to the constraints of readily available information) to use “median” rather than “average” when measuring sales prices and their trends. This does not eliminate the problem, but at least it goes some way towards compensating for any market manipulation that might occur.

[“Median” measures the middle value in a sequence of values, whereas “average” is the sum total of a sequence of values divided by the number in the sequence.]

As an example, the average sales price for Redoute’s Choice for 2010 was $419,000 whereas the median price was $350,000. Since he commenced his stud career, the figures are $450,000 and $300,000 (to 31st March 2011) respectively.

There are other statistical measures that can be used to eliminate skewing, but it was decided that “median” serves the purpose adequately in this instance, and is a measure that should be understandable to most people.

Unfortunately, it was not possible to use “median” in the measurement of each sire’s progeny earnings (not readily available), so average has been used.

I need to emphasise that newer sires can be disadvantaged in the ratios requiring “named progeny” and “runners”. Some yearlings are immediately put out to the paddock to mature, and in many cases are not “named” or even put into work for a long time after purchase. For these reasons I applied a minimum number of “runners” per crop before sires qualified for consideration in the statistics.

The statistics really only become meaningful after three or four crops, hence I am certainly not casting doubts about the ability of some newer sires where statistics have been used for the purposes of comparison to service fees (see later).

Sire Rating

In the course of comparing all of these factors, it became apparent that a sire rating was unintentionally being formulated, with each of the chosen factors being evaluated and graded. As all of the above statistical indicators are available publicly, it became a case of deciding the relative importance of each factor, and then applying a weighting to each from a breeder’s perspective.

It is important to reiterate at this point that the evaluation is from a totally commercial viewpoint.

The intention is not to breed the best race horse ever known to man – simply to breed a horse that will have a reasonable chance of being sold at a profit!

It is also important to reinforce that there was no initial intention to delve this deeply into the breeding industry, but as the statistics continued to accumulate, it was almost a fait accompli to try to formulate a reliable rating for individual sires from the commercial breeder’s viewpoint.


Consider the following four randomly selected sires (from 26 examined to date):

Sire             Offered/LF        Sold/Offered      Runners/LF Winners/LF AvEarn/MedSP
Choisir                81.27%               66.93%           65.45%           41.09%                     0.89
Fastnet Rock   85.96%               75.94%           47.02%      28.94%           0.28
Danzero                83.80%               72.38%           73.04%      45.78%           1.06
Bel Esprit                64.39%               66.06%           69.61%      44.61%           1.05

Notes:
Statistics to 31st March 2011
LF=live foals, Offered=progeny offered at public sale, Sold=progeny sold at public sale, runners=number of individual progeny that have actually raced, winners=number of individual progeny that have actually won a race anywhere, AvEarn=average earnings of all progeny (ie per live foal), MedSP=median sale price of sold progeny.

Sources: Australian Stud Book; stallions.com.au; bluebloods.net.au, Stallions 2010 (publication)

To clarify, of all live foals sired by Choisir in his 5 crops to race to date, 81.27% were offered at public sales (eg Magic Millions, Inglis etc). Of those offered, 66.93% were actually sold at the sales (clearance rate).

Of all live foals, 65.45% have actually raced. Of all live foals, 41.09% have won a race somewhere.

The average earnings of all progeny (ie total earnings/live foals) to the median sale price is 0.89 (breakeven point is 1.00).

Note that earnings, runners, and winners are constantly changing. I have endeavoured to keep the statistics as up to date as possible, but discrepancies will occur. These statistics are compiled to 31st March 2011.

Please refer to my previous comments about newer sires. Fastnet Rock is a newer sire (3 years), and his stats appear to be not as attractive as the others. At this stage, there is really insufficient history to make a judgement about him as a sire, and I only included him in the table to show how his figures compare with other more established sires, and the differential in service fees (see below).

But I also included Not A Single Doubt in my list of sires, and he commenced stud duties in the same year as Fastnet Rock.

Let’s compare the above ratios for just those two:

Sire                      Offered/LF Sold/Offered Runners/LF Winners/LF AvEarn/MedSP
Fastnet Rock            85.96%        75.94%      47.02%      28.94%            0.28
Not A S Doubt            81.28%        71.00%      57.45%      37.02%            0.99

If you were the owner of a reasonably performed broodmare, and from the information in the above tables, to which of those sires would you choose to put her?

Why?

If I now introduce into the equation the service fees for each of the sires, would it make a difference?

For the 2010 breeding season:

Choisir $  35,750
Fastnet Rock$137,500
Danzero             $  16,500
Bel Esprit             $  27,500
Not A Single Doubt              $  13,750

I do not see it as my role to pass comment on the above statistics, but I do think some reflection will give cause for a rethink on what breeders are trying to achieve and what success they might make of their breeding business.

For any of you whose interest has been retained to this point, your assistance is now required.

Put on your breeder’s cap (ie pretend you own a broodmare and you want to breed from her). What would you be looking for in the decision to choose a sire? Would you be simply looking at it from a pedigree perspective? Or would you take into account the potential saleability of the progeny, incorporating any or all of the other factors mentioned above?

If you have a list of factors, how would you rate their importance against 100%?

Just remember, you are in the breeding business to make a profit, not specifically to breed the world’s best racehorse.

Important Note:

Earnings information is generally updated continuously through the Bloodhound site (for a fee), the Racing and Sports site, and many of the other sites mentioned previously.

Sales information is available from both bloodhound.net.au or stallions.com.au, but it can take some time for updates to occur. It is probably best to wait until after the completion of the racing year (31st July) when all the sales information will have been collated and updated.

Stud information (ie live foals, named produce etc) is usually from The Australian Studbook or Bloodhound, but does not include overseas stud duties in many instances. Black type records also come from these sources, but overseas records are updated irregularly. It is noticeable that the information sometimes differs between these two sources, but not enough to make a material variation to the overall statistics.

Weightings

Until I have received input from interested forum members on the above aspects, I am hesitant to reveal the sire ratings formulated from my own weightings. This is because some of the most recognisable sires did not rate at the higher end of the scale, so I do have some doubts about the accuracy of the individual weightings I applied to the factors listed above.

In fact, of the 26 sires examined to date, the highest sire score was assigned to Danzero – a well known and highly successful sire over a long period of time, but not one that is a current “favourite”.

Consider his record over 14 crops:

Danzero

Runners/Live Foals 73.0%
Winners/Live Foals 45.8%
Sales/Live Foals 60.8%
Median Sales/Service Fee  3.48
Sales/Offered 72.4%
Av Earnings/Median Sale Price   1.06

By comparison, and using another long established sire in Encosta de Lago (12 crops):

Runners/Live Foals 72.8%
Winners/Live Foals 49.1%
Sales/Live Foals 57.8%
Median Sales/Service Fee  1.05
Sales/Offered 77.1%
Av Earnings/Median Sale Price   0.60

It is important to reinforce that these factors are weighted from a breeding perspective. The aim is to breed a foal which has a high probability of being sold at a profit.

Four of the above factors are quite similar for the two sires, so for Danzero to rank above Encosta de Lago, it is obvious I have placed a higher weighting on recovering the service fee (median sales/service fee) at the very least, and also in maximising the level of earnings against the sale price (av earnings/median sale price).

My rationale behind the higher weighting for those two factors is:

• There is no point in trying to breed any racehorse if you can’t recover the service fee as an absolute minimum
• If you want buyers to be interested in your yearling, you must be able to provide evidence that the sire’s progeny have achieved a high average earnings to sale price ratio

The 2010 service fees for the two sires were:

Encosta de Lago$143,000
Danzero $  16,500

The median yearling sales price for each sire was (to February 2011):

Encosta de Lago$150,000
Danzero $  57,500

The average earnings per live foal were:

Encosta de Lago$  70,000
Danzero $  55,000

Please note that the figures are changing all the time as sales continue, races are run, and younger progeny begin their racing careers, so they should be treated with some degree of caution. Nevertheless, for sires with an established career, the figures remain quite consistent.

It should be clear why I found the above comparisons so interesting. As I continued to expand my base of sires, the figures continued to point more and more at the “bread and butter” established sires being the most profitable from a business perspective rather than the so-called “name” or “boom” sires.

As I mentioned before, one of the major difficulties in using comparisons of this nature is that it takes at least 3 or 4 crops for any meaningful statistics to apply. Newer sires are therefore at a disadvantage under this methodology; but it reinforces the view that it is quite a business gamble to use a newer sire over an established one until sufficient history is available.

Nevertheless, some of the more recent sires are looking interesting for the future, and I am very keen to see the announcements of service fees for the 2011 breeding season. Not A Single Doubt has obviously attracted my attention because of his modest 2010 service fee.

Under my assessments, the three highest scores for sires from the breeding perspective were Danzero, Blevic and Shamardal (newer sire). Blevic is a surprise, but his figures are consistently good over a long time, and his service fee was $5,500 for 2010. Nevertheless, he is now an aging sire, his fertility is slowly declining, and his annual “book” of mares is somewhat restricted. Danzero’s fertility has also declined in recent years.

Other sires that feature quite highly are Racer’s Edge, Not A Single Doubt (newer sire), and Testa Rossa.

In concluding this section on breeding, I would like to reinforce the observation that smaller breeders appear to be taking a sizeable financial risk in putting their broodmares to the expensive sires, particularly if the mare has a moderate pedigree. I know it is every breeder’s dream to produce a champion, but the chance of that happening appears to be very slim.

If your service fee budget is less than $50,000, I think you would be better off considering Danzero, Racer’s Edge or Testa Rossa of the established sires, or Not A Single Doubt for a newer sire. If you live in South Australia, “bread and butter” Blevic ranked fractionally behind Danzero and is great value at the 2010 service fee of $5,500, although as mentioned above, there are some disadvantages.

Good luck in your breeding business and in your search for the most economical and successful sire.

Apologies for the formatting.

It all looked OK in the preview, but the actual is not so good.

I hope it is still understandable.

ED

Yes Wily, it's all my own work.

The more I delved into it, the more interested I became.

You can all beat me up at the Straddie lunch next week!

ED

PS One more instalment to come.

Incredible.

If trying to breed a million dollar yearling I would imagine you are trying to breed a potential world beater.


There is no doubt the whole THOROUGHBRED industry caper, from the breeding farm to the ractrack is a GAMBLE.

I am not sure how the highclass broodmare owners do their thinking but I would imagine if you have a mare worthy of going to Redoutes Choice or a Fastnet Rock you should be able to afford to race the resultant progeny. Perhaps I am being too simplistic.

But if you can afford to race the progeny you would probably put a reserve on the resultant sales yearling that would indicate the profit you are after and or the bid you yourself are willing to go to to keep the foal.


Than again I do not know how hard and fast business people go about their business.



There is a term called overbreeding, and it covers this quote above. Breeders who are SELLING a foal should be trying to match their mare with a stallion in the price range for the class of mare they own. If you are intending to race the resultant foal obviously this is not a problem.

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El Dufus, Have you been able to track down how many yearlings and weanlings have been sold in Australia ?

It would be interesting to know their racetrack life and ultimately their post race breeding life and compare it with million dollar yearlings from Northern Countries like the UK, France, Ireland and the US and Japan.

There is not doubt if a person is willing to spend a million dollars on a yearling they are not just looking for a racetrack performer, although there main chance at stud will be reflected by what they do on the racetrack.

It would be interesting to know how many million dollar yearling fillies failed on the track and went on to be fine and profitable mums ?

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Great thread El Dufus. 

El Dufus,

Maybe you should be the one setting out on a racing journalism career!

Obviously there will be a 'goldilocks' point which will shift year to year. From your work Danzero has been highly favoured but as the years roll on another few, not quite recognised stallions, will become the goldilocks point. This could be the selling point for you if you wanted to sell your 'report' yearly to breeders.

ALSO some parties might want to pay you NOT to produce your report!

Obviously assumptions to watch that may be skewing the figures is the quality of the broodmares themselves that go to each sire, along with the skill of the trainers that take the young progeny on. Plenty of stats available on trainer strike rates for you.

Fours

El Dufus, great read and excellent research.