Wealthy buyers came from Kuwait, from Saudi Arabia and from the Isle of Man to the Keeneland Yearling Sales this week with one burning desire: to acquire the genes of a stallion in Chesapeake City, Md.

That 21-year-old horse, Northern Dancer, has not only had a dramatic impact on racing throughout the world; he has helped create a remarkable economic phenomenon. While the markets for such other commodities as gold, silver and real estate have been suffering, the value of thoroughbred bloodstock has continued to boom, in large part because buyers are willing to pay almost anything for descendants of Northern Dancer.

The stallion's offspring sold for an average of $900,000 at Keeneland; one was a filly who went for $1.8 million, a record for her sex. A colt by Northern Dancer's most illustrious son, Nijinsky, went for a record $4.25 million. Another Nijinsky sold for $2.1 million. Yearlings by two of Northern Dancer's other prominent sons, Lyphard and The Minstrel, averaged about $400,000 apiece.

Such prices may seem crazy and irrational. But the record of Northern Dancer as a stallion does, in fact, justify them. He is a genetic as well as an economic phenomenon.

Nobody could have predicted this kind of success for Northern Dancer when he went to stud at owner E.P. Taylor's Windfields Farm in Canada in 1965, after winning the Kentucky Derby the previous year. There was, in fact, some prejudice against him because he is a very small horse. But he quickly dispelled these prejudices by the way he "stamped" his progeny. "He sires basically a type like himself," said Windfields manager Joe Hickey. "They're small, muscular, very strong."

Bill Oppenheim, the editor of the industry newsletter Racing Update, added, "Northern Dancers almost seem to have an extra spring in their ankles, they're so athletic. Even his sons who are totally different otherwise have that athletic quality."

Northern Dancer made his mark as a stallion early, when Nijinsky won the English Triple Crown in 1970. He was moved to Maryland so he would have access to better-quality mares. He has gone on to sire more than 80 stakes winners and 16 champions, but none affected his career so much as The Minstrel.

Robert Sangster bought The Minstrel for $200,000 at Keeneland in 1975. Two years later, he watched the colt win the English Derby, and then syndicated him for stud duty for $9 million. This success encouraged Sangster to plunge into the racing business on an almost unpredecented scale, and convinced him that the right way to do it was with the Norther Dancer bloodlines. "He and the Arabs have created this market," said Kent Hollingsworth, editor of The Blood-Horse. This year, Sangster outbid the Arabs for the $4.25 million record colt. Last year, he outbid them for a $3.5 million record colt.

As successful as his progeny have been on the track, Northern Dancer's ability to sire good race horses is not the principal reason for his great value and desirability. Rather, it is his ability to sire horses who become great sires. "When you analyze his record," Oppenheim said, "you have to think there is some little gene in the Northern Dancer package that moves his horses up as sires over their racing ability."

Nijinsky has gone on to become one of the world's great sires (although his offspring tend to do better in Europe than America). But what is more remarkable is the performance at stud of Northern Dancer's sons who were not especially great race horses. Be My Guest was only a moderate stakes winner; now he is the leading sire in Europe. Northerly wasn't a notable race horse, but his daughter Cupecoy's Joy is the best 3-year-old filly in America. Staff Writer never even got to the races, but he sired Timely Writer, the best 2-year-old in this country last season.

So the buyers at yearling sales know that there is a built-in salvage value for their high-priced purchases. If they acquire a Northern Dancer who becomes a champion race horse, they can hit the jackpot. (Sangster did it again last year, when he syndicated Storm Bird for $30 million). But if a son of Northern Dancer is only a moderate race horse, or even an outright failure, he still may have a lucrative career at stud.

Northern Dancer ranks in the class of stallions like Nasrullah, Turn-to and Bold Ruler as a prolific sire of sires. But there is one great difference between his career and theirs. The great stallions of previous generations were tightly controlled by the men or syndicates who owned them. "Everybody wanted Bold Rulers," said Hollingsworth, "but nobody could get them. It was a rare thing to see them in a sale."

Northern Dancer has achieved prominence at a time when the breeding business has become much more commercial; he is the first great, dominant sire whose offspring have been accessible to people who have the necessary money. He has also become recognized as a great stallion at a time when a few men with inexhaustible wealth have become active in the thoroughbred market. He arrived at an optimal moment in history, and he has made history. CAPTION: Picture 1, Northern Dancer, now 21 years old, has stamped his progeny as "small, muscular, very strong." His offspring sold for an average of $900,000 at the yearling sale at Keeneland. By Gary Emeigh for The Washington Post; Picture 2, Northern Dancer, "sire if sures," spends his days at Windfields Farm near Chesapeake City, Md. By Gary Emeigh for The Washington Post