The high exchange rate and the closing of the Russian market has created a serious situation amongst sheep farmers in Iceland, the head of the Farmers Association of Iceland (BÍ) says.
“As the situation is now on the foreign market, we’re losing 150 to 200 ISK on every single kilo [of lamb meat] that we export,” BÍ managing director Sigurður Eyþórsson told Vísir, adding that the exchange rate of the króna and the closure of the Russian market to export lamb has had a tremendous impact.
He contends, in fact, that lamb meat is now being overproduced in Iceland. During the last three months of 2016, some 1,300 tonnes of lamb meat were exported at an average price of 605 ISK per kilo. However, lamb is bought from the farmers at 550 ISK per kilo. When the cost of slaughtering and butchering is factored in, lamb meat is effectively being exported at a loss.
As reported, the Icelandic government has planned to devote some 100 million ISK to promoting the sale of lamb meat abroad. When that promotional campaign begins, at what effect it will have, remains to be seen.