
How does a fresh tuna get from Japan to Nebraska before it goes bad? And how does its journey show up in the price of your spicy tuna rolls? Zachary Crockett gets schooled.
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Zachary Crockett
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Zachary Crockett
On a shopping strip along Nebraska's Highway 64, you'll find a Walgreens, a church, a couple dive bars, and between a tattoo parlor and a cannabis dispensary, a restaurant you might not be expecting.
David Utterback
We've got all the nigiri sashimi and sushi rolls and all that. We've got items like our hama toast, which is essentially a yellowtail hamachi sushi bite that's been kind of reworked.
Zachary Crockett
That's David Utterback.
David Utterback
I run Yoshitomo here in Omaha, Nebraska.
Zachary Crockett
Utterback is a sushi chef. He spent part of his childhood in the greater Omaha area, and when he opened the restaurant in 2017, his goal was to prove that Middle America could make high quality sushi too. At Yoshitomo, the selection of fish is as varied as what you might find in New York City or San Francisco.
David Utterback
We carry a pretty standard repertoire of fish. Your tuna, salmon, yellowtail, and then we also carry sort of a daily selection of specialty fish that we fly in from Japan.
Zachary Crockett
The fact that we can enjoy a fresh piece of fish in Omaha, Nebraska a few days after it's caught off the coast of Japan is a marvel of modern technology and logistics. But the journey also involves some very tricky economics and a race against the clock.
Sasha Eisenberg
There's no commodity on earth that can lose as much value as quickly as a piece of high quality tuna destined for the sushi market. And that causes challenges for people all the way through the supply chain.
Zachary Crockett
For the Freakonomics radio network, this is the economics of everyday things. I'm Zachary Crockett. Today, sushi fish. The sushi most Americans are familiar with. A piece of fresh raw fish pressed into a little mound of vinegar. Seasoned rice is called nigiri. And it first became popular as a street food in 19th century Japan.
Sasha Eisenberg
The closest analog that we probably have in American society would be a street corner hot dog in New York or Chicago.
Zachary Crockett
Sasha Eisenberg is the author of the Sushi Economy, a book about the history and economics of sushi.
Sasha Eisenberg
It was a cheap working person's food that you would eat on the go, that people would grab on their way home from work.
Zachary Crockett
As Japan ramped up for World War II, sushi vendors increasingly moved indoors. Sushi went from Japan's equivalent of a hot dog to steak dinner.
Sasha Eisenberg
The familiar interior design, you know, you sit at a bar and it has a glass case. All of that is a fairly modern phenomenon. Sushi started to have a luxury angle. You talk to a middle class Japanese person, maybe they would go on their birthday or they would think of it as, oh, that's the place that the politicians go for lunch.
Zachary Crockett
In the post war years, Japan opened up its economy and became a leader in the global electronics industry. Japanese culture, including sushi, attracted international interest.
Sasha Eisenberg
You look at media coverage in the 1960s, and this curiosity of Japanese people eating raw fish is part of that story. The late 1960s, early 1970s, that's when you start getting the first generation of modern sushi bars opening up in capitals around the world.
Zachary Crockett
One fish that became particularly desirable was the bluefin tuna. For most of the 20th century, it had sold for pennies a pound to cat food manufacturers. But by the 1970s, American and Japanese diners had developed a taste for its oily, fatty meat. In the ensuing decades, the price of bluefin tuna rose so much that the fish became known as the diamond of the sea. Today, sushi restaurants can be found in nearly every major city. And the bluefin tuna on your plate comes from all over the world. It's raised on ranches or farms, big pens off the coasts of Croatia, Mexico and Australia. It's caught wild across the Atlantic and Pacific oceans. And for the guys at the beginning of the supply chain, it's a game of risk.
Sasha Eisenberg
There's this real jackpot mentality among tuna fishermen who are often limited in their ability to catch Fish due to catch quotas and other things. You can have a lot of days where you get nothing or you make tens of thousands of dollars off of catching one fish.
Zachary Crockett
Fishing for bluefin tuna requires a lot of expertise. A fully grown fish often weighs upwards of £500. And when a fisherman in Massachusetts or New Jersey catches one, there's a science to killing it.
Sasha Eisenberg
When a tuna is fighting for its life, it releases an acid that Japanese sometimes say cooks the meat.
Zachary Crockett
So instead of pulling the fish on board straight away, experienced fishermen let it swim around the boat until the lactic acid in its blood has dissipated. As soon as the fish is brought aboard, it's killed, gutted, and packed in ice. The lucky fisherman uses a satellite phone to call a dealer and let him know about the catch, its size, its color, and how long it fought on the line. The dealer places a few calls himself and then makes a quick decision about where to sell the fish.
Sasha Eisenberg
This dealer on a dock is deciding, should I take a gamble putting this on a plane to Japan, or should I put it on a truck to, you know, a big city on the east coast, or ship it by freight to Chicago or Austin or wherever it would go?
Zachary Crockett
There's a lot of demand for Atlantic bluefin in Japan, and a 500 pound tuna can often fetch much higher prices there than it can in the US but it's also a gamble.
Sasha Eisenberg
You're making a bet that the whole fish is going to sell for maybe 20, 30, $40,000 a couple days from now in Tokyo.
Zachary Crockett
If the dealer chooses to go that route. The tuna gets packed into a styrofoam coffin filled with ice. It's driven to an airport and loaded into the cargo hold of a plane bound for the Pacific. Once the fish touches ground in Japan, it's transported to the daily tuna auction in Tokyo's Toyosu Market.
Sasha Eisenberg
You walk into a room and there may be 200 tuna from around the world. It's like maybe if you went to a medical examiner's lab after a really horrific natural disaster. There are lots of bodies laid out on the floor, and they have these yellow pieces of paper on them with the name of the country and how the fish was caught and how many kilos it is.
Zachary Crockett
Wholesalers who represent restaurants and fish markets throughout Japan poke and prod their way through the lines of fish.
Sasha Eisenberg
These wholesalers make their initial assessment of which of these potentially hundreds of tuna are they going to want to bid on and how much are they going to want to pay. And at 5, 30, there's a clang of bells and the auctions begin. It's all happening rapid fire. Within, you know, 15, 20 minutes, all the fish in this room have been sold. The buyers wheel it back to the stall that they have in the market and start cutting it up for their customers.
Zachary Crockett
But only a tiny fraction of the tuna caught in the US goes to Japan. Most of it stays right here. Sushi is a $27 billion a year business in the US. There are more than 15,000 sushi restaurants scattered around the country that go through thousands of pounds of fresh sushi grade fish every day. And there's a vast network of distributors who fill the demand.
Nobu Yamanashi
My name is Nobu Yamanashi. I'm the president of Yama Seafood. We're the guys behind the scene that supply some of the best restaurants in.
Zachary Crockett
The U.S. yamanashi is the second generation owner of Yama Seafood. His dad started the business in New Jersey back in the 1970s, right when sushi was catching on in the U.S. today, Yama provides fish to around 800 clients, ranging from all you can eat sushi bars to the Michelin starred chain Nobu. They buy their fish daily from local east coast dealers and also import from all over the world.
Nobu Yamanashi
We sell, you know, maybe 10 to 12,000 pounds of tuna every week, 25, 30,000 pounds of salmon every week, thousands of pounds of hamachi, thousand plus trays of uni, anything like madai shimaji kanekama. We can order any exotic fish from Japan that's legal in the U.S. tuna.
Zachary Crockett
Distributors like Yama don't have to worry about getting beat out in an auction. They work out deals directly with the brokers. But that doesn't mean prices are any more predictable. Tuna isn't a standardized commodity like wheat or corn. Every fish is slightly different and the product is limited by whatever the ocean wants to yield that day.
Nobu Yamanashi
Every single wild fish is just kind of like a negotiation. Sometimes you can pay, you know, upwards of $20 a pound for a whole fish, right? And some days it might be 10 or 8, depending upon how much fish is available in the marketplace.
Zachary Crockett
The price also has to do with where the tuna comes from. A wild caught tuna is pricier than one from a tuna farm. And a tuna cut off the coast of Massachusetts doesn't fetch as much as one caught off the coast of Japan.
Nobu Yamanashi
There was a bluefin tuna from an area called Oma. It's an area between Hokkaido and the Japan mainland that supposedly has the best bluefin tuna because of like the squid and all the feed that are there. And I believe I bought it one time for $300 a pound. So very expensive.
Zachary Crockett
Tuna meat is assigned a grade based on appearance, size, shape, color, texture, and fat content. Grade 1 is a top of the line cut, the kind of stuff most sushi chefs want. Grades 2 and 3 are less desirable, but there's still a market for them.
Nobu Yamanashi
Number one would be your sushi restaurants that use it for raw consumption, like a nigiri. So the fish on top of the rice, right, it has to be aesthetically pleasing. Number two doesn't mean taste as bad. It just may not be aesthetically as pleasing. So it may not be that vibrant cherry red. It might be a little bit darker. You can sell number two to a client that maybe use it more for rolls or makis, for example.
Zachary Crockett
But buying tuna is inherently risky because the fish are sold largely intact. Yama Seafood doesn't know the quality of the meat they're getting until they cut the fish open at their warehouse every day. Some of the fish they pay grade one prices for ends up really being grade two or lower. So they have to go back and renegotiate with the brokers.
Nobu Yamanashi
Let's say you agree for $12 a pound for the fish, but when you receive it, it's not to the condition that they expect. In Boston. They kill it with like a harpoon. So depending upon where they killed the fish, there might be damage, right? In like the most expensive, most valuable part. And because of that, you know, we need a credit of 10 pound or something because the Mission Star restaurants that we had pre sold to won't accept it.
Zachary Crockett
Most fish, including the massive bluefin tuna, come into the warehouse whole. Yamanashi and his team cut it up into select pieces based on the orders that come in from their clients. During that process, much of the weight they paid for is lost.
Nobu Yamanashi
You break down a fish, right, head on, like a sea bream, for example, you lose about 50%, 60% of the fish. So if you're paying, let's say, $20 a pound for it, the actual cost of the fish is way more.
Zachary Crockett
And this is where the economics of tuna get complicated. While yama pays a set price for a whole fish, say $20 per pound, once it's cut up, each piece has a different market value. The fatty belly pieces, called toro, are highly valued, and the pieces that contain a higher portion of leaner meat, called akami, go for less. Sometimes restaurants will just buy a whole loin that might go for $1,500 or $3,000, depending on the weight. And the cut of the loin. But other sushi restaurants are more specific about what they want.
Nobu Yamanashi
Some customers want like 20 pounds of the belly portion towards the neck. Some restaurants only want the lean tuna cut from the belly. So you have to take the Torah part out. The priciest cut is like the Torah only. So you take the belly cut and then you remove the akami, the lean part. We call it Zabuton. Yeah, that can go for a pretty premium.
Zachary Crockett
How much a pound are we talking for that stuff?
Nobu Yamanashi
It could go upwards of like $40 a pound or more.
Zachary Crockett
Cut up into pieces. A single 500 pound bluefin tuna might be split between anywhere from four to 12 restaurants. Every weekday morning, a fleet of 20 vans and trucks are dispatched from the Yama Seafood warehouse and snake their way through New York City.
Nobu Yamanashi
Sometimes you're going up an elevator, sometimes you're crawling through these little tiny holes in the basement where you cannot hold a 3 foot, 4 foot wide box down the stairs. Some of These tuna weighs 100 pounds, right? So imagine carrying that down a flight of stairs in a little tiny crawl space.
Zachary Crockett
At the sushi restaurant, Fish enters the next stage of its economic journey. And after all that work to get there, it's often not the biggest moneymaker.
David Utterback
We spend a lot of time bringing in specialty fish from Japan and New York. But at the end of the day when I go and I look at what's actually selling in the restaurant, it's still sushi rolls.
Zachary Crockett
That's coming up.
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Zachary Crockett
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Zachary Crockett
For obvious reasons, many of the best fish distributors in the US Are on the coasts. If you've got a restaurant in New York City or Los Angeles, good fish isn't hard to find. But for sushi chefs like David Utterback, who runs Yoshitomo in Omaha, Nebraska, there are fewer options.
David Utterback
Here in middle America, there's a handful of coal sailors that run large regional warehouses, and they just run a giant semi truck all around the routes. Probably 98% of sushi restaurants get their fish through that supply chain. So if you've had sushi in Chicago, then you've had sushi in Des Moines, Omaha, Lincoln, Kansas City, St. Louis. That truck just drops kind of the same tuna, the same salmon that each restaurant that company is buying for. Economy. They want to give you a decent value, but they also have to buy cheap.
Zachary Crockett
One such company is True World Foods. It's the largest sushi fish supplier in the US and it was started by associates of the Unification Church, also known as the Moonies, a group that is often called a religious cult. Otterback says companies like True World are a good source for salmon and some other seafood, but for Tuna and specialty fish. He uses a number of other vendors all over the world.
David Utterback
We can cherry pick fish at certain price points, like Kin Medai, a golden eye snapper. I can get it at six different quality levels from three or four different oceans. Really, I can get it as cheap as $12 a pound or I can spend $36 a pound.
Zachary Crockett
One of his preferred sources is Yama Seafood in New Jersey.
David Utterback
They have access to a vendor in southern Japan who keeps all the fish live in a tank. Every week I get a video of all of the fish swimming around in the tank and then a list of the fish that are available.
Zachary Crockett
Whether it's coming from Jersey or Japan. Getting sushi fish to Nebraska involves air freight costs, usually somewhere around 150 or 200 bucks. For a 100 pound box, that cost can be hard to swallow.
David Utterback
That's $200. That's really hard for me to monetize. Here in Omaha, for instance, in New York, one piece of tuna, just regular tuna nigiri, is maybe 8, $9 here. If I get that same tuna from Yama and I fly it over here, I have to give you two pieces and I only get $8 for it because that's just how much things cost here.
Zachary Crockett
But Utterback doesn't let these price limitations get in the way of his enthusiasm for specialty fish.
David Utterback
I got a fish the other day called a shibudai, the snapper, $750 for two and a half pounds. I'm going to give somebody maybe half an ounce. So $9.37 for a piece of that fish.
Zachary Crockett
Restaurants try to keep their food costs at around 30% of their total budget. So to make his $9.37 per serving back on that fish, Utterback would have to sell each piece of sushi for more than 30 bucks.
David Utterback
You couldn't do that. Nobody would pay. So that's something that we would sell at a massive loss and try to make it up in something else.
Zachary Crockett
At a sushi restaurant, the really good fish tends to be subsidized by other dishes.
David Utterback
The engine of the sushi restaurant is the sushi roll. And they're just like cheeseburgers, man. They don't cost terribly a lot to make. Your basic California roll costs maybe 90 cents to make, but you can turn that around for eight, nine dollars, sometimes more, depending upon where you're at. The rolls pay for everything else.
Zachary Crockett
Ingredients used in rolls at less fancy sushi restaurants, like imitation crab meat, fried shrimp, or lower grade salmon, are a lot cheaper than high quality tuna. Some chefs may even use rolls as a way to sell leftover tuna inventory. Sasha Eisenberg, the author, says the popular spicy tuna roll was an invention of utility.
Sasha Eisenberg
Spicy tuna was developed by American chefs and popularized because they realized it. If you put a spicy sauce or mayonnaise or such on tuna, you can begin to mask an increasingly undesirable color or flavorlessness or maybe even a smell.
Zachary Crockett
In the sushi business, knowing how much fish to buy is a critical skill. In an ideal situation, says Eisenberg, you wouldn't have any leftover tuna.
Sasha Eisenberg
A good sushi restaurant should run out of things. A sushi bar that always has everything you want might not be handling its own business that well, or might be serving you some stuff they're still trying to get rid of from a couple days ago.
Zachary Crockett
All of this is a lot of work for something that diners wolf down in a single fleeting bite. But despite all of the complications of buying and selling a product of nature on a daily basis, David Utterback still marvels at the process.
David Utterback
It's crazy. 500 years ago, if you wanted an ingredient like a spice, 500 people would get on three ships and like a hundred would come back and you would have curry. Now I can just send a text message to somebody who I've met just a handful of times in Japan, and I can get something extremely special that I can serve in the most landlocked state in our country. When you think about it, we eat better than any king or emperor in the history of humanity.
Zachary Crockett
For the economics of everyday things, I'm Zachary Crockett. This episode was produced by me and Sarah Lilly and mixed by Jeremy Johnston. We had help from Daniel Moritz Rapson.
Nobu Yamanashi
I can change a hundred times, but it's just, you know, it's on my chair, it's on the aprons that I wear, the gloves, the sleeves, the pants. You just smell like fish.
Zachary Crockett
The Freakonomics Radio Network the Hidden side of Everything.
Sasha Eisenberg
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Podcast Summary: The Economics of Everyday Things – Episode 64: Sushi Fish
Released: September 23, 2024
Host: Zachary Crockett
Produced by: Freakonomics Network & Zachary Crockett
In Episode 64 of The Economics of Everyday Things, journalist Zachary Crockett delves into the intricate economics behind one of the world's most beloved cuisines: sushi. This episode explores the journey of sushi fish from the ocean to the plate, highlighting the complex supply chains, pricing strategies, and economic challenges that underpin this culinary art.
The episode opens in Omaha, Nebraska, where David Utterback runs Yoshitomo, a sushi restaurant established in 2017 with the ambition to demonstrate that high-quality sushi is not exclusive to coastal cities like New York or San Francisco.
David Utterback [01:26]: "We've got all the nigiri sashimi and sushi rolls and all that. We've got items like our hama toast, which is essentially a yellowtail hamachi sushi bite that's been kind of reworked."
Utterback's goal was to bring authentic sushi to Middle America, ensuring that the selection of fish at Yoshitomo rivals that of top-tier cities.
David Utterback [02:06]: "We carry a pretty standard repertoire of fish. Your tuna, salmon, yellowtail, and then we also carry sort of a daily selection of specialty fish that we fly in from Japan."
Bluefin tuna, once sold cheaply for cat food, have become highly prized for their rich, fatty meat, earning the nickname "diamond of the sea." The process of fishing for bluefin tuna is fraught with economic risks due to high variability in catch and prices.
Sasha Eisenberg [02:41]: "There's no commodity on earth that can lose as much value as quickly as a piece of high quality tuna destined for the sushi market."
Fishing quotas and the unpredictable nature of catching high-quality tuna make the economics of bluefin tuna particularly challenging.
Once caught, bluefin tuna are quickly processed and sold in auctions, particularly in Japan's renowned Toyosu Market. Dealers must decide whether to sell domestically or export, often betting on the highest possible returns from markets like Tokyo.
Zachary Crockett [07:02]: "There's a lot of demand for Atlantic bluefin in Japan, and a 500 pound tuna can often fetch much higher prices there than it can in the US but it's also a gamble."
At auctions, wholesalers assess hundreds of tuna simultaneously, making rapid decisions to maximize profits.
Sasha Eisenberg [07:43]: "These wholesalers make their initial assessment of which of these potentially hundreds of tuna are they going to want to bid on and how much are they going to want to pay."
In the United States, distributors such as Yama Seafood, led by Nobu Yamanashi, play a crucial role in supplying sushi-grade fish to over 800 clients, ranging from local sushi bars to global chains like Nobu.
Nobu Yamanashi [09:19]: "We sell, you know, maybe 10 to 12,000 pounds of tuna every week, 25, 30,000 pounds of salmon every week, thousands of pounds of hamachi, thousand plus trays of uni, anything like madai shimaji kanekama."
Yama Seafood sources fish both locally and internationally, navigating a non-standardized market where each fish's unique qualities affect pricing and availability.
Nobu Yamanashi [10:09]: "Every single wild fish is just kind of like a negotiation. Sometimes you can pay, you know, upwards of $20 a pound for a whole fish, right? And some days it might be 10 or 8, depending upon how much fish is available in the marketplace."
Tuna is graded based on several factors, including appearance, size, color, texture, and fat content. Grade 1 is the highest quality, preferred by sushi chefs for its visual and taste appeal, while Grades 2 and 3 serve different market segments.
Nobu Yamanashi [11:24]: "Number one would be your sushi restaurants that use it for raw consumption, like a nigiri. So the fish on top of the rice, right, it has to be aesthetically pleasing."
The grading impacts pricing significantly, with premium cuts like toro (fatty belly) commanding prices upwards of $40 per pound.
Nobu Yamanashi [14:23]: "It could go upwards of like $40 a pound or more."
Distributors face substantial costs, including transportation and the loss of weight during fish processing. For instance, cutting a whole fish can result in a 50-60% weight loss, driving up costs.
Zachary Crockett [13:10]: "You break down a fish, right, head on, like a sea bream, for example, you lose about 50%, 60% of the fish. So if you're paying, let's say, $20 a pound for it, the actual cost of the fish is way more."
Moreover, air freight costs for transporting fish to landlocked areas like Nebraska can be prohibitive, limiting access to high-quality fish and forcing restaurants to adjust pricing or accept losses.
David Utterback [20:14]: "Whether it's coming from Jersey or Japan. Getting sushi fish to Nebraska involves air freight costs, usually somewhere around 150 or 200 bucks. For a 100 pound box, that cost can be hard to swallow."
To manage high costs associated with premium fish, sushi restaurants often subsidize expensive items with more affordable dishes like sushi rolls. Rolls can be made inexpensively and sold at a higher margin, balancing the overall menu profitability.
David Utterback [21:43]: "The engine of the sushi restaurant is the sushi roll. And they're just like cheeseburgers, man. They don't cost terribly a lot to make. Your basic California roll costs maybe 90 cents to make, but you can turn that around for eight, nine dollars, sometimes more, depending upon where you're at. The rolls pay for everything else."
This strategy allows restaurants to offer high-quality sushi without prohibitive costs for consumers, maintaining a balanced and profitable menu.
Sasha Eisenberg, author of The Sushi Economy, provides historical and economic context, explaining how sushi evolved from a street food in 19th century Japan to a global luxury item.
Sasha Eisenberg [04:12]: "You talk to a middle class Japanese person, maybe they would go on their birthday or they would think of it as, oh, that's the place that the politicians go for lunch."
Eisenberg highlights the adaptability of sushi in different markets, such as the creation of the spicy tuna roll in America to mask less desirable fish qualities.
Sasha Eisenberg [22:34]: "Spicy tuna was developed by American chefs and popularized because they realized if you put a spicy sauce or mayonnaise or such on tuna, you can begin to mask an increasingly undesirable color or flavorlessness or maybe even a smell."
Despite the complexities and economic hurdles, David Utterback remains passionate about delivering high-quality sushi to Omaha.
David Utterback [23:36]: "It's crazy. 500 years ago, if you wanted an ingredient like a spice, 500 people would get on three ships and like a hundred would come back and you would have curry. Now I can just send a text message to somebody who I've met just a handful of times in Japan, and I can get something extremely special that I can serve in the most landlocked state in our country."
The episode underscores that the modern sushi experience is a marvel of logistics, technology, and economic strategy, enabling people in even the most unexpected locations to enjoy this delicate cuisine.
David Utterback [23:36]: "When you think about it, we eat better than any king or emperor in the history of humanity."
Episode 64 of The Economics of Everyday Things offers an in-depth look into the world of sushi, revealing the economic intricacies that enable this global culinary staple to grace plates from Tokyo to Omaha. Through interviews with industry experts and insightful analysis, Zachary Crockett illuminates the hidden economic forces shaping our everyday dining experiences.