Rising Production Costs Lead to Historically Low Mutton Stocks

icelandic sheep

Agricultural newspaper Bændablaðið reports that Iceland’s stocks of mutton have reached a historic low.

According to recently published statistics, the slaughter season has never before begun with as little stored mutton as this year.

Stocks at the end of July were recorded at 767 tonnes, with monthly sales of around 500 tonnes. Decreased production of mutton is attributed to several factors this year, including rising costs and fewer animals slaughtered this year.

These forces have combined to lead to an all-time low in stocks of mutton, although officials will not have a complete picture until mid-September, when slaughterhouses have submitted their status reports on stock levels.

Ágúst Torfi Hauksson, CEO of Kjarnafæði Norðlenska, has cautioned that the numbers ought to be seen in context. He stated to Bændablaðið: “Mutton has been very cheap on the market and perhaps much cheaper than it should be based on production costs. Icelanders are used to the price of this product, and therefore a considerable increase could lead to less demand. But consumers should still bear in mind that it is in their interest that sheep farmers are paid. If farmers are paid so little that they are forced to stop farming, then this could also lead to a shortage of lamb meat.”

According to Ágúst, the market is actually in good condition at the moment, with the price of mutton reflecting a balance of the supply and demand.

Like many other industries, production costs have risen sharply in the last year. Combined with inflation, it is natural for prices to rise significantly. The question seems to be whether consumers will accept this, and whether demand will adjust itself accordingly.

 

Recent Halt in Domestic French Fry Production Raises Questions Concerning Tariffs

import tariff iceland french fries

When Icelandic frozen- and ready-made food company Þykkvabæjar stopped producing french fries earlier this summer, they were the last remaining producer of the popular side dish in Iceland.

Now, with no domestic producers left, all french fries in Iceland must be imported. The lack of domestic production, however, has raised questions over what, exactly, protectionist tariffs are protecting.

In a recent report by the National Association of Employers, it came to light that Icelandic consumers have paid a total of ISK 800 million in french fry tariffs in the past two and a half years.

Those imported from Canada and the EU are taxed at a rate of 46%, and french fries from elsewhere are taxed at a much higher 76%. Given the growing share of the tourism and service industries, this cost is not trivial.

The National Association of Employers has petitioned the Minister of Finance to repeal the tariffs, stating that they no longer protect anything and only hurt the consumer.

Ólafur Stephensen, managing director of the National Association of Employers, has cited the french fry tariff as one more unnecessary burden. During a time of high inflation, he stated, such burdens should be minimized as far as possible: “These numbers clearly show that there is a lot at stake for Icelandic consumers, the trade and the restaurant sector to abolish this protectionist tariff that no longer protects anything. The duties amount to 300-400 million per year and at a time when food prices are constantly rising, such sums make a difference.”

Ólafur, along with other consumer-advocacy groups, has since called on the Minister of Finance to repeal the tariff.

 

 

M4.9 Earthquake Shakes the North Overnight

earthquake iceland 2022

The Meteorological Office of Iceland reports that North Iceland was struck by a series of earthquakes last night.

The announcement, seen below in a public Facebook post, states that the largest recorded quake in the string was registered at 4:01AM, September 8, at a magnitude of 4.9.

The quake was centered approximately 12km east-northeast of Grímsey, and was reported to be felt throughout the North. Some 300 smaller aftershocks were also reported.

The Meteorological Office reports that such quakes are common in this region of Iceland, and that no signs of significant unrest have been detected.