Bridging the Gap: An Argentine Adventure

Stepping out at the San Isidro training center in Buenos Aires, Argentina to the highly unusual (for Northern eyes) sight of horses and work riders flying around the track saddle-less, one could easily be made to believe that they've stepped into an entirely different racing world. What I found during a week-long stay in Buenos Aires last month for the inaugural Gran Venta Selecta yearling sale, however, is that, in terms of its challenges, the Argentine racing industry isn't much different from anywhere else. When it comes to opportunities, I think that we'll see Argentina become increasingly prominent in the global bloodstock market.

Argentina has South America's largest Thoroughbred industry, with about 7,000 foals produced annually, and is the continent's most prominent representative on the world stage: recent Grade I winners like Vale Dori (Arg) (Asiatic Boy {Arg}) and Hi Happy (Arg) (Pure Prize) spring to mind, and the country has also supplied to the U.S. Horse of the Year Invasor (Arg) (Candy Stripes), 10-time Grade I winner Paseana (Arg) (Ahmad {Arg}) and unbeaten Grade I winner and leading sire Candy Ride (Arg) (Ride the Rails). Argentine-bred mares have produced Grade I winners like Carina Mia (Malibu Moon) and Salutos Amigos (Salute The Sarge), and in Japan they have been on a particularly hot run as of late, turning out Group 1 winners like 2018 Japanese champion 2-year-old filly Danon Fantasy (Jpn) and 2016 champion 3-year-old colt Satono Diamond (Jpn) (Deep Impact {Jpn}). G1 Tokyo Yushun and G2 Prix Niel winner Makahiki (Jpn) (Deep Impact {Jpn}) has an Argentine-bred second dam.

Much of the country's Thoroughbred business takes place in the province of Buenos Aires, where there are three racetracks: San Isidro, home of the country's most important race, the G1 Carlos Pellegrini, which is staged over a mile and a half each December; Palermo, which is a 30-minute drive down the highway from San Isidro; and La Plata, which is about an hour outside the city proper. San Isidro and its adjacent training facility are owned by The Jockey Club, and the training center is home to some 2,000 horses, while Palermo stables about 1,800 and La Plata 1,500. Palermo is owned by the government and leased out to a private company and has 4,500 slots in the basement of the racecourse, while La Plata is owned by the province. Racing is held seven days a week, year-round in Buenos Aires with typically 15 or more races on a card. Large fields (it's common to see up to 16 runners) are the norm.

One current challenge facing the Argentine industry surrounds funding. While Palmero has an agreement in place to receive a cut of funding from its slots, San Isidro and La Plata have historically received a stake from the province's slots program (not at racetracks). What started out as a supplement, however, has now become the lifeblood of prizemoney, and at San Isidro 75% of the purse money now comes from the slots, and 25% from takeout.

Not a major problem on the surface, but last year the government made a move to remove the slots contribution to racing entirely, something that would have crippled racing. The industry managed to avert the crisis, for now, but nonetheless the racing fund has decreased over the last two years from 12% to 9%. Especially in an economy that is struggling, it goes to show that just like everywhere else, it is going to be vital for the Argentine industry to prove its importance to the government going forward.

Just like in the U.S., the Argentine industry must rise to the challenge of sports betting. As in the U.S. legislation surrounding sports betting is handled by each province, and in late March sports betting was legalized in the province of Buenos Aires. Like in the U.S., insiders of the Argentine racing industry are calling for a modernized betting system to keep pace with other sports, including fixed-odds wagering and online betting platforms for racing. There is no online wagering on racing in Argentina.

In the early years of the Argentine Thoroughbred, a lot of stock was imported from Europe. The Argentine Thoroughbred as we know it today, however, has been largely built on American bloodlines, with American-breds-mostly shuttlers-dominating the top of the sire table for the better part of the last 20 years. Those names include Southern Halo, Mutakddim, Pure Prize, Roman Ruler, Harlan's Holiday, Bernstein and many others. Descendants of Storm Cat have been especially popular.

The last two racing seasons, however, the recently deceased Irish-bred Catcher In The Rye (Ire) (Danehill, out of a Darshaan mare) has led the standings, and Argentine-breds Equal Stripes (Arg) and Not For Sale (Arg) (by American-bred Parade Marshal) have also featured prominently. A handful of breeders I spoke with in Argentina said the interest has been shifting back to importing European blood, and indeed the G1 Irish Derby winner Treasure Beach (Ire) (Galileo {Ire}) has gotten off to a solid start at stud there, and Kingman (GB)'s half-brother Remote (GB) (Dansili {GB}) has his first runners in Argentina this season. John F Kennedy (Ire) (Galileo {Ire})'s first yearlings have also been well received.

I would always be a proponent of diversifying the gene pool, but some of the reasoning I heard for the lean towards Europeans was concerning. Some breeders said they felt the breed was losing the stamina, durability and toughness it was known for, and to revitalize that they felt they needed to go to Europe. As you would have read in the TDN recently, beginning in 2013 South America phased out Lasix in black-type races, and what I heard from some breeders is that the Europeans are durable and tough, and they can do it without Lasix. Those of us in the U.S. know that we also produce durable and tough horses capable of performing Lasix-free, but isn't this just further proof that perception is reality? Some food for thought for American racing's stakeholders.

But, let's get back to the purpose of the visit, which was the Gran Venta Selecta yearling sale on Mar. 21. The select sale of 91 yearlings was an initiative between Arqana, local sales company Arg-Sales and leading stud farms Haras Abolengo (breeder of Candy Ride) and Haras Vacacion (breeder of Paseana). The goal is to create an international sale in Argentina and promote overseas investment in the country's Thoroughbred industry. As previously touched on, Argentina has been in a tough political and economic situation for more than a decade, and thus racing has been low on the priority list for government. The industry is having to prove its worth to hold on to funding, and last year alone two of the country's major stud farms shut their doors. Abolengo owner Julio Menditeguy said at the time of the sale, “The industry is under pressure. People are getting tired, this is getting very expensive. [Growth] won't happen if we're only thinking about the domestic market.”

Another factor that has hindered the globalization of the Argentine yearling market is the fact that sales are conducted quite differently than in other major racing nations. Rather than having a few large sales throughout the season, farms band together with one or two others to sell their own stock at smaller sales of 40 to 50 yearlings, with sales held multiple times a week beginning in March and lasting through the winter. Such a format makes it implausible for international visitors to jet in and out to hunt for the best yearlings. Gran Venta Selecta is attempting to establish a slot on the international sales calendar for Argentina to offer its best stock, and Abolengo and Vacacion threw their full weight behind it, offering the best of their crops that otherwise would have been spread over multiple sales, and offering more fillies from their best families than is customary.

The top-selling filly brought a record price for an Argentine yearling of 5.6-million pesos (about $140,000), but perhaps the best indicator of where the sale could be headed is the fact that each of the four overseas visitors bought multiple yearlings. None of these buyers were doing business in Argentina for the first time, but in the immediate future they will be one of the most important catalysts to get new investors to Buenos Aires.

Emmanuel de Seroux of Narvick International said after signing for a pair of yearlings, “I think this is a very good first experience to show the Argentine yearlings to the world. I think people will be more and more interested to come and they need to, because they can access some fantastic pedigrees at 20% of the price of what they'd have to pay at Keeneland or Newmarket.

“You can come to a sale like this and buy half a dozen very well-bred fillies for $50,000 or $60,000 each, and you start a very nice breeding program. If you have one or two good ones out of the five or six it's fantastic, and the others, due to their pedigrees, they're still very nice broodmares for the future.”

My entire experience in Buenos Aires left me believing that this is a sale that will gain international traction. I could see it heading in the direction of the Cape Sale in South Africa: Cape Thoroughbred Sales used the destination of Cape Town as an anchor to attract visitors in the middle of the Northern Hemisphere winter, threw in some excellent hospitality with racing and farm visits and, on top of that, presented the cream of their country's yearling crop. Within 10 years, it has developed into a sale that annually draws top buyers from around the world.

Buenos Aires has all the ingredients to do the same thing: fantastic hospitality from some of the kindest people I've ever met; an incredible cosmopolitan city and farms rich with history and culture. And, most importantly, top-class horses: these yearlings were clearly raised well, with strength and great bone and conformation; as the Arqana team themselves remarked, they would have liked to take some of them to their August sale. Training fees in Argentina are about a quarter of what they are in the U.S., and if one proves good enough to be sold to America, the returns could be huge.

Gran Venta Selecta sits comfortably on the calendar between Australia's Melbourne Premier Sale and the Dubai World Cup, Inglis Easter and The Championships, so next March I would highly recommend a trip down to Argentina. You'll be guaranteed excellent company, mouth-watering barbecue, empanadas and wine, and, chances are you'll leave with a yearling or two.