The Verdict: Australia’s industry players evaluate its vibrant market – John Messara
In a five-part series ANZ Bloodstock News speaks to some of the industry’s key players for their perspective on the incredible performance of the 2021 major yearling sales season.
We asked them for their take on what’s behind all the money that’s been flying around sales rings since January and also for their thoughts on the current general state of the Australian racing and breeding industry.
In today’s edition, Jo McKinnon talks to Arrowfield Stud supremo John Messara (AM). After a hiatus in 2020 due to Covid-19, Arrowfield returned to the Inglis Easter Yearling sale last week where they once again took leading vendor honours and topped the auction with a Snitzel colt selling to Hawkes Racing for $2.5 million.
The former Racing NSW Chairman reflects on that success and shares his views on the current trends in the yearling market that he believes could continue for some time yet.
John, firstly, congratulations on being the leading vendor (by aggregate) once again at the Inglis Easter Yearling Sale.
Thank you. We did have the greatest number of horses so we should have got a pretty decent result in the end, but I’m very pleased with the outcome which was above $21 million. I’m told by Inglis people that it’s a record for Arrowfield which is great.
There was plenty of emotion about the last Redoute’s Choice yearlings going through an auction. What were your feelings about that?
There was a level of sadness there but this has been dribbling through over the past two years since we lost him. A lot of things remind us of him.
Even though he’s dead he’s not gone because he’s certainly living through his sons and daughters, who produce extraordinary results on racetracks every weekend, so I think his legacy will live on for quite a time to come.
In recent memory I don’t think there have ever been tributes to a stallion quite like there has been for him, has there?
I’m very touched and very much appreciate people’s thoughts and kindness. I have done a lot of interviews about him. There’s a lot I can say about him, one thing is he was a very dominant stallion that influenced the breed.
What we all try and do is find the horse that can leave an influence and legacy on the breed and he has certainly done this and continues to do so, so we are a long way from over.
His son Snitzel’s performance in the Easter sales ring was quite amazing, wasn’t it?
He’s the winner of four champion titles which is very difficult to do as well, so we have to tip our lid to him. He’s got some of his better books coming through as a result of the higher fees and better results, so I’m expecting a lot more from him over the next few years.
And notably we also had the last of Deep Impact’s progeny go through the ring at the Easter Yearling sale.
We are always experimenting with new bloodlines and trying new things and in a way we are victims of our own success, because Redoute’s Choice, Snitzel and that Danehlill line has become so pervasive now that it’s hard to breed a horse outside that line.
If you look at, for example, the Golden Slipper this year, there were 15 entrants that all had one line of Danehill in the first three removes and some had more.
So, we start to look for an outside influence to come in that will work with that line to give a bit of balance. That’s what it’s about and a continuing challenge.
You get a great line that comes in and it sort of takes over and you think ‘well we have made it, that’s great’ but you have to find a way out of it now. That’s the great thing, it’s the nature of business we are in. You can never actually rest.
The Snitzel – Rising Romance (colt) top lot for $2.5 million was another great achievement for the farm?
He was an exceptional horse from the first day when we saw him as a foal and from the day he turned up at the sale and all the way through. He had a faultless, rearing, magnificent structure, framework and great attitude and good blood.
The first foal of that mare ran well on debut. The Hawkes family knew they had a full relation with a lot of ability. John said the moment he saw that horse he fell in love with it and wasn’t going to leave without it. He had to pay a bit to get it and we are very grateful.
We have bought back 15 per cent of that horse. I’m pleased to be in it.
From a broader perspective on the Easter sale, it was quite incredible how many $1 million plus lots (23) were sold, wasn’t it?
I have never seen anything like it. The only way to get your feet back on ground is to realise they are Australian dollars and not US.
In US dollars they are 75 percent of the numbers. Every now and again I have to have a look at it and say, this is amazing but hang on a minute, it’s not quite the size when you convert it and that’s the only way I can rationalise it.
It’s been a fantastic sale. There’s a lot of confidence in the industry I would say and a great catalogue was put together by Inglis.
People are trying to draw conclusions as to how the yearling sales season has performed quite like it has. What’s your current take on this?
We have never lived through a pandemic in my time that was as threatening as this one and also the governments, medicos and scientists were frightening the hell out of us about how bad it could be, so to some extent our psyche changed and I think that is a contributing factor to what’s happening.
Our psyche told us that we have looked at death in the face, and you know life is short and we should do what we want to do and throw a bit of caution to the wind, so people are improving their homes, buying boats, horses and new cars.
The stock market is going up. Everything is rising in the face of what was a very challenging time and an economy that will find it very hard to pull out of all the debt that’s been created to keep the place going.
So, it’s an unusual situation. I think this has all had an impact and people are saying ‘look, we have survived this, I’m going to live for now because the next one might get us’. That’s what’s driving people.
The other part is that interest rates are also so low. You can borrow money virtually for nothing and there’s an enormous amount of money in the marketplace that the government’s been pumping in to keep the economy going and unemployment low.
All of those things together have helped the horse market, in addition to fundamentals of racing in Australia.
We have the best racing economy in the world. It is amazing the prize money that is on offer and the quality of racing and organisation of racing. We don’t realise how lucky we are here.
And importantly, our administration made sure there was no break in racing during Covid. We were the only show in town and only entertainment for some time, and we capitalised on that through extra wagering that was concentrated on our sport, which was the only competition people could bet on.
It helped us in a funny way to help come up with very good wagering revenues for the year and we get a share of that, it’s our primary source of income.
All of these things together have made for what we see today and are likely to over the next 18 months. Will it last? It depends on changing conditions. We have to be a bit flexible these days as things are changing all the time.
In your time in racing and breeding, being front and centre of the industry, you would not have experienced a market like this, or, have you?
I have seen a market like this that wasn’t real in 1989. Companies were formed with borrowed money. TJ and Bart came into it as a result.
I couldn’t believe at the time the sort of prices we had received for some of these horses. 30 years ago they were getting prices akin to this. They were paying $1-1.5 million for fillies.
I remember going to the sale in 1989 expecting to get $250,000 for each of three very nice fillies and they went for an average of $1 million. I was out by a factor of about 3-400 percent.
I walked out thinking something is wrong with all this and we figured it out it wasn’t cash. It was all done on credit and collapsed afterwards.
Apart from that, we haven’t seen anything like this. It could be a false economy, or a new economy where it will be the way things are.
There’s going to be less travel, a surfeit of cash around the system, low interest rates and high wagering. Those things may conspire to give us similar markets or conditions to now.
Things might change due to external matters. There could be a skirmish between China and the US and suddenly people will lose confidence and tighten their belts and go back into their homes.
There’s enough tension around the world where any of those things like that may cause a destabilisation and reduction in confidence. You need that sort of confidence to go out and buy horses.