Icelandic sheep farmers want to raise the price of lamb by 25 percent this year; the world market price for lamb has risen by 50 percent since the beginning of 2008, and 135 percent in terms of changes to the currency exchange rate.
From June 2008 to June 2011, the price of lamb in Iceland has gone up by 8.7 percent compared to roughly 35 percent for fish; the price increase for lamb is still below the consumer price index. This year alone prices have gone up by 14 percent, Morgunbladid reports.
According to mbl.is, only pork and potatoes have decreased their market value while milk has gone up by 22 percent, bread and corn by 36 percent, fruits by 39 percent, vegetables by 21 percent, sugar by 75 percent, coffee by 55 percent and soft drinks by 39 percent.
In defence of the price increase, Sindri Sigurdsson, the chairman of the National Organization of Sheep Farmers, pointed out that postal tarifs have already gone up by 20 percent without protest.
Gylfi Arnbjörnsson, the chairman of the Icelandic Federation of Labor Unions, condemned the demands made by sheep farmers, and encouraged the general public to boycott Icelandic lamb to protest the increase in price, while the labor union Framsýn in Húsavík supports the claims made by sheep farmers.
Sheep farmers in Iceland are permitted to produce as much lamb as they want in a season and unlike restrictions prevalent in dairy farming, there are no limitations to how many a sheep a farmer can slaughter per season.
Sheep round up. Photo by Eygló Svala Arnarsdóttir.
The industry has been sheltered from competition against imported lamb with the aid of heavy custom fees and the industry receives subsidies of ISK 4.3 billion a year (USD or EUR).
An increase in slaughterhouse rates has not been calculated into the already 14 percent price increase, and prices are expected to rise further depending on these rates.
Since 2008, the export of lamb has become a booming industry and farmers are exporting approximately 40 percent of their lamb production overseas. On the other hand, countries such as Australia and New Zealand have seen a reduction in lamb production due to droughts and expanding dairy production.
South American countries such as Chile and Paraguay are expected to join the export race in coming years.