Icelandic lamb farmers struggle with rising costs and diminishing profits in Halldórsstöðum

Icelandic lamb farmers are facing a stark economic reality, as the costs associated with their operations leave them with little to no income from lamb carcasses after expenses are accounted for. The financial outcomes vary across farms, but many sheep farmers are balancing their agricultural work with additional employment to make ends meet.

This fall, Ragnar and Bjarney, farmers from Halldórsstöðum, are sending approximately 950 lambs to slaughter. The process necessitates the livestock truck to make four trips to collect the lambs. Ragnar noted an average sale price of over 1,000 Icelandic krónur per lamb, but despite the apparent profitability, high variable costs significantly impact earnings.

Specifically, for a lamb with a carcass weight of 17 kilograms, the gross income for the farmer amounts to around 34,500 krónur. After accounting for variable costs, the profit dwindles to about 20,000 krónur. Fixed costs further reduce this to approximately 6,600 krónur, with depreciation and financing costs erasing any potential profit.

Ragnar mentioned that while prices for sheep products have risen in recent years, they are countered by other rising costs and difficult economic conditions, such as high interest rates. Both he and his wife, Bjarney, emphasize the extensive effort required to sustain their farming operation, particularly during peak seasons in spring and autumn, when they struggle to manage many responsibilities.

Despite these challenges, the couple remains optimistic about the future of their farm and the sheep farming industry in general. Bjarney expressed a desire to dedicate more time to their farm, reflecting a commitment to their agricultural livelihood.