Icelandic sheep farmers face financial difficulties as expenses exceed earnings

Icelandic sheep farmers are facing financial challenges this season as expenses outweigh earnings. Ragnar and Bjarney, farmers from Halldórsstöðum, are sending nearly 950 lambs to slaughter this autumn, but the costs associated with their livestock mean they will receive nothing profitable for the meat once all expenses are accounted for.

Ragnar notes that the market price for lamb meat hovers around 34,500 krónur for an average 17-kilogram carcass, but after calculating variable costs, profit margins drop significantly. Fixed costs further reduce the overall profit to just 6,600 krónur.

Furthermore, the current economic environment, characterized by high interest rates and rising costs, puts additional pressure on sheep farmers. Many, including Bjarney, have to maintain secondary jobs in order to sustain their farming operations. Bjarney works full-time elsewhere during weekdays, emphasizing the strain it places on their ability to manage the farm effectively. She remarked that it would be ideal if they could focus solely on their agricultural business.

Despite rising meat prices in recent years, Ragnar points out that overall financial pressures make the situation difficult. “There is a sense of satisfaction with progress, but everything else in society is also increasing,” he said.

The couple remains resilient, planning to continue their farming into the future, although they acknowledge the significant effort required to keep their operations running, especially during peak seasons in spring and autumn.