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One inescapable conclusion from this week’s Keeneland September sale (and it’s this week that tells the tale) is that there are far too many yearlings being produced for the demand.

The Keeneland sales staff have done a masterful job attracting buyers from around the globe, consignors and their staff are working themselves ragged through very long days (with temps mostly in the 90s for this sale, too), and even so the sale has been a money-loser for most breeders. The stud fees to produce the yearlings of 2010 were the highest of the past decade. So, the fact that the Keeneland September stats have stayed stable (or slightly improved) is good but still is not enough to make this a profitable situation.

There are a lot of reasons for it, and most of them don’t matter because we can’t change them. The situation on the ground is all that really matters.

We can change how many yearlings we produce and how many we consign.

From the numbers that the Jockey Club has projected, the 2011 crop of foals is expected to be down about 20 percent, and dropping another 20 percent out of the breeding pool would put supply about where the demand is.

I would estimate that a Keeneland September catalog in the range of 3,000 yearlings would be a generally profitable sale, and that is a full one-third smaller than this year’s Keeneland auction.

It won’t be easy to get there, but I believe we are on our way. And we’ll know a lot more about that in November.