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Meat and wool

by  Alistair Nicol and Caroline Saunders

From the 19th century, New Zealand built its economy on exports of wool and sheep meat. At first most exports went to Britain. Later, markets became more diverse – halal-slaughtered meat is now sold to Muslim countries, and minced beef for hamburgers to the United States.


Meat products, animal welfare and consumer protection

New Zealanders each eat around 45 kilograms of beef and sheep meat every year, but most meat produced from sheep and cattle is exported.

Meat products

The meat of an animal, often termed the carcass, makes up around 85% of the animal’s economic value (excluding the wool on a sheep). Also valuable are co-products such as skins for leather, edible organs such as the liver and kidneys, meat offcuts used for pet food, meat meal for use in poultry and pig feeds, and excess fat (tallow), a useful energy source. Pharmaceuticals are also made from animals.

Primal cuts and offal

The main cuts of meat that we eat, such as roasts, chops and steak, come from an animal’s carcass, and are called primal and sub-primal cuts. Meat from the organs and other internal parts is called offal. It includes edible organs such as the liver, heart, kidneys and tongue, as well as sweetbreads, from the thymus and pancreas glands. Tripe is from the stomach lining. The testicles of young lambs – often called mountain oysters – are considered a delicacy by some.

Welfare and safety

Regulations about transporting and handling animals protect their welfare, and systems used at abattoirs and freezing works are audited to ensure their humane slaughter. The markets for animal products increasingly demand more traceability of the product from the ‘field to the fork’, and quality assurance programmes involving the farmer, the processor and the supermarket are becoming common.

All meat products are subject to systems that ensure they are fit for human consumption. This starts with a signed, legal declaration by the farmer about the origin and health status of the animals, and the types of feed they have eaten. The animals are inspected before slaughter, and later the carcasses and internal organs are examined for diseases, defects or contamination. Random sampling of meat for drug residues is also undertaken. These checks and sampling are done by independent inspectors.


Classifying products

Grading ‘raw’ products

When first harvested, wool and meat are known as ‘raw’ products.

Carcasses and wool are put into grades or classes based on their specific characteristics (a result of genetic differences between the animals and the way they have been farmed). This allows processors to select the exact product they want, and farmers to be paid according to the quality and type of wool or meat.

Meat grading

Most carcass characteristics are related to the amount of saleable meat. Generally, as carcass weight increases, saleable meat yield (SMY) increases, because the percentage of bone decreases. However, as carcasses become more fatty, SMY declines because more fat has to be trimmed off to meet market requirements. Carcasses which are thicker and more rounded have a slightly higher SMY, due to a higher lean-meat-to-bone ratio.

Meat classification

The New Zealand Meat Classification Authority system classifies beef carcasses into four types – steer, heifer, cow and bull – according to the sex and maturity of the animal. These are classified further depending on their fat content and muscling. Lamb carcasses destined for export are classified using a similar system.

A typical classification of a beef carcass would be 270 P2 Steer, which is:

  • a steer (a male cattle beast castrated when young)
  • a 270-kilogram carcass
  • P fatness – a light to medium fat cover, 3–10 millimetres deep
  • muscling class 2 – good muscle development.

Measuring muscle and fat

Historically, carcass weight has been measured using scales, while fatness and muscling were visually assessed by a grader. Since the late 1980s, graders of lamb carcasses have also used a metal probe to determine the fatness grade. In the early 2000s, computer digital image analysis was being used to assess the SMY and value of lamb carcasses.


Meat exporting history and meat processing

The beginnings of the frozen meat industry

The New Zealand meat industry developed to service the British market. The first shipment, of 842 cases of canned meat, was in 1870, and in 1882 the first consignment of frozen carcasses was successfully shipped.

After this, exports of whole frozen lamb carcasses to the UK grew rapidly. Stock numbers increased on farms, and farmers moved from breeds that were good wool producers to those that were good for both meat and wool. The processing sector also developed – in 1882 there were three freezing works; by 1893 there were 21.

A good profit

The Dunedin carried 4,909 sheep and lamb carcasses in the first shipment of frozen meat from New Zealand to Britain. They averaged 80 pounds (36.3 kilograms) each in weight, and fetched sixpence per pound in the London market. One of the companies that shipped carcasses received 22 shillings twopence per animal after expenses – compared with the 13 shillings they would have got in New Zealand.

Loosening the ties to Britain

New Zealand sheep meat and dairy products enjoyed preferential access to the UK market through the first half of the 20th century, despite increasing competition from suppliers in other countries. However, by the 1960s it became clear that the UK would join the European Economic Community (EEC), which led to concerns that New Zealand trade would be seriously affected. The New Zealand Meat Board introduced the Lamb Market Diversification Scheme, under which meat companies had to send 22% of exports to countries with no substantial market for New Zealand lamb. However, when the UK joined the EEC in 1973 it was still a major market for NZ sheep meat.

European sheep meat tariffs

When the UK joined the EEC, New Zealand sheep meat exports were allowed preferential access as a transitional measure from 1973 to 1977, as New Zealand had voluntarily restricted exports. After 1977, meat exports were subject to the European Union’s Common External Tariff of 20%. In 1980, New Zealand agreed to limit sheep meat exports to the European Union to 245,000 tonnes, in return for a lowering of the tariff to 10%. In 1989 the preferential access was reduced to 205,000 tonnes in return for a zero tariff – then under the Uruguay Round trade agreements, the preferential access was increased to 225,000 tonnes.

Processing for export

From the beginning of the frozen meat trade until the 1970s, whole carcasses were exported. Since the 1960s, almost all beef has been exported as boneless cuts, and since the 1980s, lamb carcasses are increasingly often processed rather than shipped whole.

In the early 2000s, most meat was exported as cuts, reducing transport costs, as they require far less shipping space than carcasses.

Adding value

Processing adds value to the product and enables processors to meet the very precise specifications of supermarkets, and the requirements of consumers. The different cuts vary markedly in value, with the large muscle groups of the hindquarters and back worth more. These high-priced cuts contain less connective tissue, so are suitable for steaks and roasts. They make up around 45% of the total saleable meat in a carcass. The rest is used for stews, casseroles and mince.

Tenderness

Contraction of muscle fibres due to rapid chilling after slaughter (known as ‘cold-shortening’) toughens meat. This is prevented by ensuring that only low levels of muscle glycogen are present in meat before it is chilled – most easily done by electrical stimulation of the meat to cause muscle contraction and use up glycogen.

In lamb and beef cuts destined for high-priced markets, tenderness is enhanced by ageing, which causes the breakdown of muscle fibres over time. Most cuts are aged in vacuum packs to prevent weight loss by evaporation, and contamination by micro-organisms.


Marketing sheep meat

Volume and value of exports

In 2006, 362,000 tonnes of sheep meat were exported from New Zealand, earning $2.3 billion. New Zealand produced 6% of the world’s total sheep meat, but accounted for 55% of the international sheep meat trade and 75% of the lamb meat trade.

From the early 1990s to 2008, the volume of sheep meat exports remained steady, at around 350,000 tonnes each year. However, the value of these rose steeply from 1991 to 2001, due to increased prices and a favourable exchange rate.

Markets

In the early 2000s, the UK was still the largest export destination for sheep meat, by both volume and value. The rest of the European Union was the next most important market, taking nearly 150,000 tonnes in 2006. Lamb exports to Europe accounted for 51% of New Zealand’s total lamb export trade for 2006. Other markets included North America (44,500 tonnes), North Asia (39,200 tonnes) and the Pacific (24,500 tonnes).

The value of sheep meat exports to China grew considerably from the 1990s, from $560,000 in 1995 to $37.8 million for 2005. In total, exports to North Asia (Japan, Korea and Taiwan) have grown from $74.6 million in 1995 to $157.6 million in 2005, with a record trade of $190.5 million in 2004.

Halal slaughter

In 1979 the New Zealand Meat Producers Board secured a four-year contract to export 200,000 tonnes of lamb to Iran. To meet the requirements of the Islamic religion, this meat had to be slaughtered in accordance with halal practices.

Halal slaughter is a ritual way of killing animals that follows Islamic teaching. It requires an abattoir approved and supervised by an Islamic religious organisation, and a trained Muslim slaughterman. The animal must be healthy at the time of slaughter, must face Mecca, and must be killed with a single cut of a clean, razor-sharp knife that severs the carotid artery, jugular vein, gullet and windpipe, without cutting the spinal cord. All the blood must be drained from the carcass before any further processing.

The Federation of Islamic Associations of New Zealand signed the first annual contract with the Meat Producers Board (later the Meat Industry Association) in 1984 to provide certification for Muslim halal slaughtermen. From these beginnings, New Zealand has become the world’s largest exporter of halal-slaughtered sheep meat. It also exports halal-slaughtered beef.

From carcasses to cuts

Since the mid-1980s there has been a progressive shift away from shipping whole sheep carcasses. In 1971 over 90% of sheep meat was exported as whole carcasses; in 2006 just 3.9% was. The export of lamb as cuts has increased from less than 10% in 1971 to 81.5% in 2006.

From frozen to chilled meat

The volume of chilled exports has grown significantly since the commercial release of Captech packaging, which uses carbon dioxide to extend the life of chilled red meat, in 1988. Chilled products made up just below 15% of total export tonnage from 2002 to 2005. It sold for higher prices than frozen meat – between 1999 and 2005, the value of chilled exports fluctuated at around 20% of total sheep meat exports, peaking in 2004 at 25%.


Marketing beef

Export markets

All of New Zealand’s beef was sold on the domestic market until the 1950s. The first exports of boxed beef were made to the US in 1958, and subsequently to Canada.

In 2006 beef was exported to over 80 countries. The largest market was North America, which took 48% of New Zealand’s beef, followed by North Asia (Japan, Korea and Taiwan), with 23%. The domestic market took 15% of the country’s production.

New Zealand was also a major exporter of grain-fed and organic beef products, and of halal beef to Malaysia and Indonesia.

Volume

In 2006 New Zealand produced 1% of the world’s beef and veal, 19% of which was consumed domestically. New Zealand contributed 6% of the global beef trade, and was the world’s fourth largest beef exporter, behind Brazil, Australia and Argentina. In 2006 New Zealand exported over 370,000 tonnes of beef, with a value of $2.3 billion dollars.

Hamburger heaven

Most of the beef that New Zealand exports to the US is eaten as ground beef – much of which is used to make hamburgers. In 2005 Americans consumed, on average, around 31.75 kilograms of beef each. Ground beef made up 42% of that – a lot of hamburgers.

Export tonnages and values

United States

The US limits competition with its domestic beef producers by setting quotas for beef imports. In the early 2000s New Zealand’s quota was 213,402 tonnes per annum. Over 70% of beef exported to the United States was lean beef for hamburgers. The remainder supplied the hotel and restaurant trade and the retail sector, and other sectors for further processing.

Asia

Japan was New Zealand’s third largest international market in terms of volume – but the high value of the meat cuts made it second largest in value, at $277 million.

South Korea was the second largest beef export market in terms of volume and third largest by value. In 2006 New Zealand exported over 46,000 tonnes, worth over $233 million.

Taiwan was the fourth largest beef export market by value. In 2006, over 24,000 tonnes of New Zealand beef went to Taiwan, earning $147 million.

Europe

Apart from exporting about 200 tonnes of high quality beef to the European Union, New Zealand beef producers have little access to the European market.


Wool production and processing

Wool is shorn from sheep once or twice a year. Around 220,000 tonnes – about 5.4 kilograms per sheep – is harvested annually in New Zealand.

Fine, finer, finest

The finest Merino wool is the most valuable because it can be made into lightweight, soft fabrics for fashion clothing. When wool testing began in the 1980s, the average fibre diameter of New Zealand Merino wool was 20 to 21 microns. Once farmers identified their finest sheep, they could breed from them so over time the whole flock became finer. The average diameter is now about 19 microns, and the finest is as low as 12 microns – the finest wool in the world.

Wool properties and uses

All wool is classified before it is sold. Environmental, management and genetic factors all have a marked influence on its properties, including fibre diameter, length, tensile strength, yield (the proportion of clean washed wool from the original greasy state), colour and bulk. These all affect the use to which the wool can be put. For example, very fine, white Merino wool is suitable for making soft fabrics that can be dyed a wide range of colours and worn against the skin. Strong and off-coloured wool from a Drysdale would make a fabric too coarse to wear, which could only be dyed dark colours – so it is used for carpets and not apparel.

Strong or coarse wool is suitable for blankets, upholstery fabric, curtains and carpets. Short, discoloured wool can be used for insulation, or for absorbing industrial spills. Protein extracted from wool is used in cosmetics and medicine. Wool grease (lanolin), which is recovered from the wool scouring process, is a base in many cosmetic products.

Wool is tested to ensure that residual insecticide levels from dipping or spraying the sheep are below internationally acceptable minimum levels.

Shoddy, twaddle, tops and yarns

Shoddy is woollen cloth that is torn up, shredded and made up into new fabrics. Twaddle is the measure of the strength of a solution of sulfuric acid used to remove burrs from wool. Tops are wool that has been scoured and combed. Yarns are spun from tops, and are then ready to be woven or knitted.

Wool processing

Wool is largely processed outside New Zealand. About 80% is scoured in New Zealand to remove grease, dirt and other contamination. Nearly 70% is exported raw or scoured, to be spun and woven overseas. Of the 30% processed in New Zealand, just over half is made into carpets, rugs or other finished products locally. The rest goes through various stages of wool processing, including combing, spinning and being made into yarn.

Many advances have been made in New Zealand in developing processing techniques that enhance wool as a product. These include shrink-proofing, permanent creasing, flame and insect resistance, and extraction and purification of wool grease.


Wool products and marketing

Wool was New Zealand’s main export earner from the 1850s until the start of the 20th century, and produced almost 90% of total export income in 1860. Since then wool has fallen in importance – in 2006 it made up 2.73% of New Zealand exports, with a value of $839 million. However, New Zealand remains the world’s second largest exporter of wool, with 20% of the world’s exports by volume, after Australia (52%).

Wool products

The specific use of wool depends on the fineness of the fibre. Coarse wool is used in the interior textile industry and fine wool in the apparel industry. In 2006 New Zealand’s wool exports were, by volume, 5% fine wool, 15% medium, 33% fine crossbred and 47% coarse crossbred.

About 68% of New Zealand’s wool production is used in the manufacture of interior textiles:

  • machine-made carpet (50%)
  • hand-made carpet (11%)
  • bedding (4%)
  • upholstery (3%).

The remaining 30% is used for apparel:

  • machine-knitting yarn (17%)
  • hand-knitting yarn (7%)
  • woven apparel (6%).

Export markets

In the early 2000s New Zealand exported wool to over 50 different countries. The top export markets by volume were:

  • China (25%)
  • United Kingdom (13%)
  • India (10%)
  • Italy (9%)
  • Belgium (8%).

There were around 25 active wool exporters in New Zealand, with the five largest handling around 80% of exports. About 45% of New Zealand’s wool was sold directly to private buyers and end users. Farmers were also developing relationships with processors so they could adjust wool production to better meet the requirements of the processors.

Simply the best

Italian textile company Loro Piana is the single biggest buyer of the world’s finest wools. It buys large quantities of Merino wool from New Zealand farmers to produce Zelander fabrics. Each year the company runs the Loro Piana World Wool Record Challenge to find the world’s finest bales. In 2006 it paid $1,000 per kilogram for two bales of 12-micron New Zealand wool.

Competitive advantage

A key competitive advantage for wool exporters is that all wool sold at auction in New Zealand is tested at an accredited testing facility, which measures commercially important features, so wool can be supplied to meet buyer specifications. The characteristics tested include yield, condition (moisture content), fibre diameter, colour, length, strength, and bulk. Many manufacturers are beginning to demand that chemical residues are also measured, as customers become more conscious of environmental and health issues.


Hononga, rauemi nō waho

More suggestions and sources


How to cite this page: Alistair Nicol and Caroline Saunders, 'Meat and wool', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/mi/meat-and-wool/print (accessed 19 April 2024)

He kōrero nā Alistair Nicol and Caroline Saunders, i tāngia i te 24 o Noema 2008