A Cut Above

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As we eat our steaks, Yamamoto outlines his vision of a herd that can produce 50,000 head a year. "You have to be big enough to control the market," he says. "I still have high hopes." But he's running out of believers.

"We've been hearing the same thing for three and a half years," says Hatoff. "A lot of promises have been made."

Allen Brothers had a contract to buy all the top-end Wagyu meat Yama Custom Beef could supply. But recently the companies have parted ways. According to Hatoff, Yamamoto is no longer producing beef that meets Allen Brothers' specifications. Allen Brothers now gets its Wagyu beef from sources in Australia and elsewhere.

With people lining up to pay obscene amounts of money for this meat, how did Yamamoto manage to screw things up?

According to Hatoff, the Wagyu beef market took off faster than expected, leaving Yamamoto scrambling to fill orders. Cattle that should have spent 300 or 400 days on the feedlot to achieve their full marbling potential were there for less than 200. But worst of all, cattle that should have been held for breeding were being slaughtered.

"To meet demand, he was destroying the herd," says Hatoff.

With the Allen Brothers contract suspended, Gary Yamamoto isn't slaughtering many animals anymore. But now he's stuck on the horns of a cattle-raising dilemma. He needs to stop selling meat to build the herd as big as it needs to be. But if he stops selling meat, he'll run out of money. "I have my entire fortune invested in this stuff," he says. "People are saying I'm crazy."

He could sell some of his bulls or bull semen to raise cash, but then he wouldn't control the Takeda genetics anymore. Partnerships, satellite ranches and South American investors all have been discussed. So has the idea of selling the whole herd.

"I have the purest herd in the U.S., and I want to keep it intact," Yamamoto says with considerable emotion.

There are other Wagyu cattle in the United States. They are descendants of four Wagyu bulls that were smuggled out of Japan under mysterious circumstances in 1976. They eventually made their way to Georgetown, Texas, and a rancher named Don Lively who, along with his partners, made a fortune selling semen. In 1991 The Wall Street Journal reported that the bull semen that was sitting around in Lively's storage shed at the time was worth more than $2 million.

Buyers of Lively's Wagyu bull semen crossbred Angus and other breeds with the Wagyu. By then impregnating the crosses with Wagyu semen from one of the other bulls, it was possible to get three-quarter-Wagyu offspring, the minimum genetics required to achieve highly marbled meat.

But those four bulls are part of the reason there is so much lackluster Wagyu beef on the American market today. They were Wagyu, all right, but some have alleged they were genetically inferior. And since there were only four of them, the line was limited.

Chefs and waiters at expensive steak houses will swear to you that their Kobe steaks come direct from Japan. Maybe they're lying, or maybe they just don't know what they're talking about. On December 12, the United States and Japan ended a two-year reciprocal ban on beef imports. Although real Kobe beef soon will be available in the United States again, there hasn't been any in this country for more than two years.

Kobe is a city in Japan. Calling American-raised Wagyu beef "Kobe beef" is deceptive to begin with. And to make matters worse, much of what the American beef industry calls Kobe is plain ordinary beef with an inflated price tag. Some of it doesn't even meet the standards for USDA Prime. I've been burned buying Wagyu beef both on the Internet and in restaurants.

"You should always be skeptical about so-called Kobe beef," says Todd Hatoff. "Too many people are selling beef with minimal genetics and calling it Kobe."

But when full-blooded American Wagyu cattle are properly fed, they produce some of the best meat in the world. And when that meat is properly aged and properly cooked, it's something that every meat lover should experience at least once.

Unfortunately, the industry is a mess.

Will Yamamoto come up with a plan that will give the United States a steady stream of top-quality Wagyu beef? Will he sell his herd to somebody else who can?

The future of American Kobe is in Yamamoto's hands. According to Todd Hatoff, the Japanese will never allow any more Wagyu cattle or genetics to enter the United States. "The Japanese believe that the American Wagyu industry has bastardized their national treasure," Hatoff says.

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Robb Walsh
Contact: Robb Walsh