"THE HORSE MARKET FORECAST:
Advice from Cleve Wells"
By Marilyn Morris Mayer
The old stock market adage, "Buy low, sell high" couldn't be more appropriate to the horse industry than it is today--if you're talking about very good yearlings and unbroke 2 year olds.
"The market is good," says Cleve Wells. "It's never been better for pleasure horses (and really all horses). Western pleasure is such a popular event. No matter how much negative criticism that it gets, for the last 25 years it's done nothing but grow!"
PRICES ON QUALITY YOUNGSTERS ARE AT AN ALL-TIME LOW...
And at the moment, says Cleve, horse prices have really dropped on yearlings and 2 year olds with very little training, while many top show horses are bringing six figures--$100,000...$125,000...$250,000--and more! If there ever was a time when the average person could wind up with a top quality horse for themselves or for resale, it would be now.
Just what is a six-figure horse? "They've got to be good," Cleve notes. "By that I mean they've got to have major event success under their belts--Congress wins; and Top-5 placings at the World Show and Congress, and so on. We're not talking about 'should; could; maybe.' We're talking about real deals here," he cautions.
MINIMAL RISK; AWESOME POTENTIAL RETURNS...
"Yearlings have been high," Cleve explains, "bringing $10,000 to $20,000." But now those same caliber horses are bringing $5,000 to $7,500, he notes. "The breeder is not making the money that he's made in the last 10 years, but the general public--the middle-class person--can get back in the game; can afford to play and possibly come out with a good horse in the end. If you can afford $700 a month training; some shoeing; and a little vet bills, you can play this game now."
"What I'm saying is that training is paying. It pays to train a horse--it pays to spend a year or a year and a half because you can be paid back if you come out with one of the upper end horses. You know, there's never been more money for customers to make. There's risk...but when you start out at $3,000 or $7,500 and you've got a chance of reaping $75,000 or $125,000, then putting $7,500 into training is worth it. Taking your time (with the horse's training) is worth it because you're not spending $20,000 to build a $35,000 product.
Cleve says basically what people are doing is "financing" a good horse. "There's so many people that don't have $50,000 laying around, but they can pay a thousand a month. They can throw $5,000 (for the purchase) and pay $1,000 a month to produce the product.
WHAT TO LOOK FOR IN A YOUNG HORSE...
What should you be looking for in those young western pleasure prospects? "As always, you like to stay with a popular bred horse," Cleve says. "Every trainer in the world likes to see some Zippo Pine Bar in the pedigree. And it's going to be more mama's side now, than the sire's side, because there's still more Zippo daughters than there are Zippo studs."
Also, be sure your trainer understands the market, he notes. "The biggest thing is staying with a trainer that understands this market...and understands that an evaluation is not 'Do I have a good horse?' but it's 'Do I have a horse that's worth putting the money in?'"
With that in mind, Cleve cautions buyers to be realistic about young geldings from a profit standpoint. "You know, the gelding is your most dangerous to play with (financially speaking) because, until it gets to the show pen, it only has a market that will go so high. $20-thousand to $25-thousand for a gelding is pretty tops--unless be becomes one of the big-time players." He adds, "There's a chance he could turn into a $75,000 gelding, but that's a lot harder to do than it is with a mare."
EVALUATING A GOOD HORSE...
Cleve bases his evaluation around two key components: good moving and good minded horses. "I'm looking for proper movement," says Cleve. "They've got to want to go slow; they've got to want to go soft. And soft means not being in a hurry to get to the next stride."
"And you want a horse that's good-minded--has to be good minded--because the people who are paying this big money are amateurs and youth. You've got to have a horse that wants to decelerate more than accelerate; you've got to have a horse that is accepting to your hands and legs; you've got to have a very strong hock; and you've got to have a horse that stands up in their shoulders."
"We see a lot of good-hocked horses," Cleve points out, "but the shoulders are what I am really big on...because everybody can drive a horse up, but I can't pick those shoulders up inside a competition show pen." Cleve admits they play 'devil's advocate' at his place when testing and evaluating a prospect. "We try to push the shoulders down." And if they fall down in their shoulders? "Well, we pet 'em and say, 'Thank you, you're a good horse--but you need to pack your suitcase," he adds with a laugh.
"You can pick a horse up a hair in the pen, but there's no way to lift those shoulders--to pick that horse up on his front end a bit when he's on a full drape in a 5-judge system." He adds, "Look for a horse with minimal 'leaks' -- one that's not trying to lean, push and leak someplace-- that are willing to stand up willfully and do their job. It all comes back to self carriage.
DO YOUR HOMEWORK...
Cleve says this is a good time for buyers to really pay attention to the sales, and look at the yearlings so they become better at knowing what the good ones look like, and what a good mover is. And keep 'good paper' (pedigree) in mind.
Then once you find that prospect--that yearling or unbroke 2-year old--there are things you can do at home to prepare the youngster, before sending them to the trainer for evaluation. Cleve says a little "preschool" will save you some money because it cuts the time it takes for a trainer to evaluate your horse.
"I've got a mare in here right now that might be a good filly, but she had no preschool," Cleve explains. "She wasn't taught how to tie; she wasn't taught how to ground tie or to longe. She went straight from pasture to training, and hasn't has her brain worked with yet at all, so the evaluation takes me longer."
"If a horse has had some preschool, then I can evaluate them for the 'cream of the crop' in 45 days. If they haven't had any preschool then it might take 60 or 90 days."
IT WON'T LAST...
"I'll guarantee you it won't last! Because broodmares are cheap right now, but it's all supply and demand. Right now the world's so saturated with yearlings...and what happens is people start leaving half their broodmares open." Cleve explains. "So when they quit raising them. And then in five years from now everybody will say, 'Well, where are the yearlings?' Then five people start trying to buy the same yearling--and the prices goes up."
"It's a good, good time to get into the yearling market," says Cleve. Bottom line: yearlings (and 2 year olds with little training) are as cheap as they may ever be--and show horses are high. "If we're going to play this 'low-yearling, high-horse show prices' game then we need to understand that these horses that are bringing high dollars are the cream of the crop--but they're out there!
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