
The voodoo of lobster economics - ValentineC
http://www.theglobeandmail.com/news/national/my-travels-with-larry/article19557387/
======
rayiner
My dad grew up in rural Bangladesh. He once told me that when he was young,
lobster was a common food in villages. Overseas demand hadn't yet picked up,
so the plentiful catch was food for the locals. Today of course, all that
lobster gets shipped overseas, and the locals can't afford to eat it. At least
they can take solace in the fact that the market is allocating scarce lobsters
to those who value them the most.

~~~
PeterWhittaker
Friends who grew up in rural Nova Scotia remember the same thing: Lobster were
bugs of the sea, poor man's food.

Well, to me they are still bugs of the sea. Vile, really.

~~~
zwegner
Relevant xkcd: [https://xkcd.com/1268/](https://xkcd.com/1268/)

~~~
delinka
I think lobster is more like cockroach. And even after that, I still enjoy
dipping cooked lobster into melted butter ... mmmmm ...

~~~
pcrh
Pinchy!

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jrells
I didn't get it, the pricing was pretty much what I would have guessed. The
markup isn't that high, especially considering they're hard to store and ship.
Other things have much higher markup (drinks, fashion, any goods manufactured
in china). Where is the voodoo economics?

~~~
ChuckMcM
I think that was the point. I don't know what the author's motivations were
for writing this piece but I would speculate that someone, sitting in their
comfy chair reading a story about how Maine lobsterman are complaining about
getting only $4/lb for lobster, and seeing it as the $60/plate special at the
restaurant complained "Gee someone is making bank here at our expense!" And
the author deconstructs that notion by putting names and faces on all the
people in the path of harvest to production.

But given the title, he will get people who think they are being ripped off to
read it, and then they will perhaps find they aren't really being ripped off,
there are just a lot of hands between them and the lobster's origin.

~~~
brazzy
I think an interesting and nontrivial thing explained by the article is why
raw lobster prices are going down but restaurant prices aren't: the largest
percentage markup is added by the restaurant, but most of the price the
restaurant pays is added by the middlemen and does not vary with the price of
the raw product.

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sk5t
Although not particularly economic, it'd be a shame not to recommend a reading
of David Foster Wallace's "Consider the Lobster":
[http://www.gourmet.com/magazine/2000s/2004/08/consider_the_l...](http://www.gourmet.com/magazine/2000s/2004/08/consider_the_lobster)

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pault
I live in Belize and you can literally pick them up off the reef with a mask
and a snorkel (as long as they're in season!). Anyone who has ever tried will
know that's easier said than done, however.

~~~
mcdowall
I was in Belize a few years ago and think I had Lobster for breakfast, lunch
and dinner every day, so cheap!

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scjody
Hey, since this is HN, I should point out how nice it was to page through that
article and NOT have to deal with any fancy CSS / JavaScript scrolling tricks.
Very nice, Globe and Mail.

~~~
driverdan
Plus it was all on one page! A well written, well laid out article.

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hristov
I guess the moral of the story is that if we want affordable food, we should
eat local. It seems like half of the costs to the restaurant are associated
with shipping the lobster alive.

~~~
munificent
> we should eat local.

What I found interesting was that the economics are affected by both spatial
and _temporal_ locality. The part about holding tanks that could keep lobsters
alive for months to sell them out of season when prices were higher is a good
reminder that eating seasonally can be as import for affordability as eating
locally.

~~~
rdtsc
Exactly. My relatives have a business where they basically keep food in
storage until it is out of season then sell it.

It can be locally grown or imported. It depends on the client. Some buy in
bulk from local farmers, keep it (paying storage costs) then sell later.

~~~
avighnay
I am not sure about other places but here in India, this is termed as
'hoarding' and is illegal, however not that it has made that model non
existant

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TheBiv
>"But everyone knows the most important reason: The disappearance of codfish
means lobsters have no natural predators."

Wait. What happened to the codfish? Overfishing?

~~~
krisgee
[http://en.wikipedia.org/wiki/Collapse_of_the_Atlantic_northw...](http://en.wikipedia.org/wiki/Collapse_of_the_Atlantic_northwest_cod_fishery)

Yep. If you were wondering why so many east coasters are in Alberta digging
for oil this is why.

~~~
TheBiv
Wow. Thank you very much for sharing!

~~~
krisgee
I was honestly sort of surprised people didn't know. The collapse of the
fishery was so completely devastating to the east coast (where I was born)
economy that it's just sort of a given back home that lobster prices are
awful, your potatoes are going to rot and your kids are going to move (like I
did).

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TheBiv
Taking a look at the value of Larry along his journey (as the author does):

Larry's value out of the water: $8.00

Value after staying at LobsterWorld: $9.30

Value after staying at Tangier (aka lobster spa): $11.60

Value after flying FedEx: $14.40

Value after passing through wholesaler: $17.40

Value on plate: $52.20

It looks as though the 'voodoo' (if there is any) of lobster economics is
mainly set by the restaurant who marks up the product.

~~~
randallsquared
The article also points out that after paying the chef, wait staff, etc, the
restaurant makes about $4 on that lobster dinner. I think the reason it seems
weird is that we implicitly assign the same effort-value to each of these
stages, but in fact the restaurant has more work to do per lobster than any of
the previous stops in the chain.

~~~
jthol
More work but they are also in a very high rent area compared to all other
steps.

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angersock
Crabbing is much the same--some friends of mine down in the Gulf used to make
a living that way. Some of the hardest-working most resourceful people you'll
ever meet.

The amount of effort put into these industries boggles the mind.

~~~
rayiner
Berries are similar. Costco charges several dollars a pint. My wife refuses to
buy any. Where she's from (Oregon), they're an invasive weed, and you can pick
so much off the branches you can't give them away.

~~~
judk
So does she go to Oregon whenever she wants a berry?

~~~
krisgee
Principle of the thing. I don't buy scallops unless I'm down home because the
markup on it seem ridiculous (especially since they're usually less fresh and
of lesser quality).

~~~
_delirium
That's how I feel about figs. I like them, and will eat lots of them when I'm
in Greece or California, but I'm not paying €1 ea. to buy them in Denmark.
(Apparently they don't ship well, so are very expensive outside of the areas
where they're cultivated.)

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chrisbennet
My Dad was a first mate on a lobster boat in his retirement. He told me that
they had to sell their lobsters to the same guy they bought their bait from.

Also,"The Secret Life of Lobsters" is a great book. It was a best seller so it
must have had wider appeal than youd think.

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mrfusion
Has anyone ever tried raising lobsters in captivity? Wouldn't that be cheaper
than boats and traps?

~~~
guiomie
[http://articles.orlandosentinel.com/2012-04-08/business/os-d...](http://articles.orlandosentinel.com/2012-04-08/business/os-
darden-lobster-farming-20120408_1_bill-herzig-spiny-red-lobster)

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wcarss
I really initially thought this would have to do with the novel Accelerando.

