Sushi Fish

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.

UTTERBACK: We’ve got all the nigiri, sashimi, 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.

That’s David Utterback.

UTTERBACK: I run Yoshitomo here in Omaha, Nebraska.

Utterback is a sushi chef. He spent a 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.

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.

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.

ISSENBERG: 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.

For the Freakonomics Radio Network, this is The Economics of Everyday Things. I’m Zachary Crockett. Today: Sushi fish.

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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.

ISSENBERG: The closest analog that we probably have in American society would be a street corner hotdog in New York or Chicago.

Sasha Issenberg is the author of “The Sushi Economy,” a book about the history and economics of sushi.

ISSENBERG: 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. 

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.

ISSENBERG: The familiar interior design, you know — you sit at a bar and it has a glass case — all of that is a modern phenomenon. Sushi started to have a luxury angle. You talked 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.”

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.

ISSENBERG: 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.

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.

ISSENBERG: 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. 

Fishing for bluefin tuna requires a lot of expertise. A fully-grown fish often weighs upwards of 500 pounds. And when a fisherman in Massachusetts or New Jersey catches one, there’s a science to killing it.

ISSENBERG: When a tuna is fighting for its life, it releases an acid that Japanese sometimes say cooks the meat.

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.

ISSENBERG: 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?”

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 U.S. But it’s also a gamble.

ISSENBERG: You’re making a bet that the whole fish is going to sell for maybe $20-, $30-, $40,000 a couple of days from now in Tokyo.

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.

ISSENBERG: You walk into a room and there are maybe 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.

Wholesalers who represent restaurants and fish markets throughout Japan poke and prod their way through the lines of fish.

ISSENBERG: 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.

But only a tiny fraction of the tuna caught in the U.S. goes to Japan — most of it stays right here. Sushi is a $27 billion dollar a year business in the U.S. 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.

YAMANASHI: My name is Nobu Yamanashi. I’m the president of Yama Seafood. We’re the guys behind the scene to supply some of the best restaurants in 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.

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 a thousand plus trays of uni. Anything like madai, shima-aji, kanikama. We can order in any exotic fish from Japan that’s legal.

In the U.S., tuna 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.

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.

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 caught off the coast of Massachusetts doesn’t fetch as much as one caught off the coast of Japan.

YAMANASHI: There was a bluefin tuna from an area called Oma. It’s the 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.

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.

YAMANASHI: Number 1 would be your sushi restaurants. They use it for raw consumption like a nigiri — so, the fish on top of the rice, right? It has to be aesthetically pleasing. Number 2 doesn’t mean taste is 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 2 to a client that maybe uses it more for rolls or makis for example.

But buying tuna is inherently risky. Because the fish are sold largely intact, Yama Seafood doesn’t fully 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 1 prices for ends up really being Grade 2 or lower. So, they have to go back and renegotiate with the brokers.

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, they might be damaged right in, like, the most expensive, most valuable part. And because of that, you know, we need a credit of 10 pounds or something because the Michelin star restaurants that we presold to won’t accept it.

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.

YAMANASHI: You break down a fish, right? Head on, like a sea bream, for example, you lose about 50 percent, 60 percent, 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.

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.

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 toro part out. The priciest cut is like the toro 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.

CROCKETT: How much a pound are we talking for that stuff? 

YAMANASHI: It can go upwards of, like, $40 a pound or more.

Cut up into pieces, a single 500-pound bluefin tuna might be split between anywhere from 4 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.

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 three-foot-, four-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.

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.

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.

That’s coming up.

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For obvious reasons, many of the best fish distributors in the U.S. 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.

UTTERBACK: Here in middle America there’s a handful of wholesalers that run large regional warehouses. And they just run a giant semi-truck all around their routes. Probably 98 percent 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, Saint Louis — that truck just drops kind of the same tuna, the same salmon at each restaurant. That company is buying for economy. They want to give you a decent value, but they also have to buy cheap. 

One such company is True World Foods. It’s the largest sushi fish supplier in the U.S. and it was started by associates of the Unification Church, also known as the Moonies — a group that is often called a religious cult. Utterback 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.

UTTERBACK: We can cherry pick fish at certain price points. Like, Kinmedai, a golden eye snapper. I can get it at six different quality levels from, you know three or four different oceans, really. I can get it as cheap as $12 a pound, or I can spend $36 a pound.

One of his preferred sources is Yama Seafood in New Jersey.

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.

Whether it’s coming from Jersey or Japan, getting sushi fish to Nebraska involves airfreight costs — usually somewhere around $150 or $200 for a 100-pound box. That cost can be hard to swallow.

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.

But Utterback doesn’t let these price limitations get in the way of his enthusiasm for specialty fish.

UTTERBACK: I got a fish the other day called the Shibudai, this 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. 

Restaurants try to keep their food costs at around 30 percent 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.

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.

At a sushi restaurant, the really good fish tends to be subsidized by other dishes.

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 cost maybe $0.90 to make, but you can turn that around for 8 or $9, sometimes more, depending upon where you’re at. The rolls pay for everything else. 

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 Issenberg, the author, says the popular spicy tuna roll was an invention of utility.

ISSENBERG: Spicy tuna was developed by American chefs and popularized because they realize that if you put a spicy sauce or mayonnaise or such on tuna, you can begin to mask an increasingly undesirable color or a flavorlessness or maybe even a smell. 

In the sushi business, knowing how much fish to buy is a critical skill. In an ideal situation, says Issenberg, you wouldn’t have any leftover tuna.

ISSENBERG: A good sushi restaurant should run out of things. I have heard people complain about, “Oh, the sushi bar, you know, they’re always out of whatever.” 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 of days ago.

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.

UTTERBACK: It’s crazy. 500 years ago, if you wanted an ingredient like a spice, 500 people would get on three ships and, like, 100 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. 

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For The Economics of Everyday Things, I’m Zachary Crockett. This episode was produced by me and Sarah Lilley, and mixed by Jeremy Johnston. We had help from Daniel Moritz-Rabson.

YAMANASHI: I can change 100 times, but it’s just, you know, it’s on my chair that I sit in in the office. It’s on the aprons that I wear, the gloves, the sleeves, the pants. You just smell like fish.