Cost of Dairy to Increase in New Year

According to a recent statement by the Ministry of Food, Agriculture, and Fisheries, the average cost of dairy products throughout Iceland is set to increase in the coming year.

As of January 2023, the wholesale price of dairy and dairy products in Iceland will increase by 3.5%.

The cost increase, which sets the price at which milk is bought from dairy farmers, is in response to increases in production costs since the price was last assessed in September of this year.

According to the Ministry, processing and distribution costs have risen by 5.06% in the last year, in addition to a 2.38% increase in livestock fees. Collective agreements have also caused recent increases to the cost of labour, in addition to the generally high inflation currently affecting the Icelandic economy.

In Focus: Iceland’s Dairy Industry

There is a famous cow in Norse mythology named Auðhumla. According to myth, she played a key role in the creation of the world – milk from her udders fed the first giants and she freed the first god, Búri, by licking on a salt block. Iceland’s first settlers not only drank milk, they used […]

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“Farmers Are Drowning in Data”

icelandic cows

Technology is playing an increasingly large role in the Icelandic farming and agriculture landscape, RÚV reports. According to Sigtryggur Veigar Herbertsson, a consultant with the Icelandic Agricultural Advisory Centre (RML), farmers around the country have already started making use of such technological innovations as automated milking machines, GPS trackers on sheep, and self-driving tractors. Automated feeding machines have also started making an appearance in barns around the country.

Technologies such as GPS water management systems are becoming increasingly important to farmers as they deal with climate change and its consequences, such as drought, Sigtryggur says. But while there is a comparatively high proportion of technologies such as automated milking machines in use in Iceland, says Sigtryggur, Icelandic farmers still “…lag a little behind in drone and soil cultivation technology.” There are companies in Iceland that use drones to detect and map vegetation around the country, but this technology has not yet been used for agricultural purposes in Iceland. By contrast, in Denmark, Norway, and Sweden, drones are often used to map out routes for self-driving tractors and to spread different quantities of fertiliser according to the needs of various crops.

The technological devices that are already in use in Iceland are also collecting enormous amounts of data that has yet to be fully exploited by farmers. This data could potentially be of use in improving agriculture practices says Sigtryggur, but as of yet, it has proven difficult for farmers to parse effectively. “Farmers are drowning in data,” he remarked, explaining that RML is in the process of going through this excess of information. Much of it comes from milking machines, says Sigtryggur, and he’s hopeful that this wealth of information can be made usable for farmers in the near future.

Milk Consumption on the Decline

Icelanders’ milk consumption has declined in recent years. Since 2010, total sales of “drinking milk” have gone down by 25%, or 7.9 million litres. The category “drinking milk” nýmjólk (whole milk), léttmjólk (low-fat milk), undanrenna (skim milk), and fjörmjólk (a vitamin-enriched blend of low-fat and skim milk) and is meant to differentiate between milk and other dairy products.

In 2018, 23.8 million litres of milk were sold, which is down 2.8% from the previous year. All combined, dairy companies that are part of the Association of Dairy Producers (SAM) sold 2.2% less milk between 2017 and 2018. The association reports a decline in the sales of all dairy products except cream and powdered milk.

While milk sales have decreased, however, sales of dairy products such as cream, powdered milk, and spreads have increased considerably since 2010. Cream sales have gone up the most, or around 30.4% since 2010 (7.1% just from last year).

Skyr sales have also fallen last year, with 169 fewer tons sold. Additionally, 102 fewer tons of cheese were sold in 2018.

Even as milk sales are down, however, people in the dairy industry are being encouraged to innovate. In 2017, the dairy cooperative Auðhumla gave three grants for the development of entrepreneurial projects that use milk as a key ingredient. One of the grants was ISK 3 million [$24,556; € 22,056] for innovative uses of whey that is a byproduct of milk production. Another ISK 3 million was given for the development of Jökla, a milk-based liquor that would be the first of its kind to be produced with Icelandic milk. The third grant went to a pilot project that seeks to develop health products from colostrum.