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.

 

Home Slaughter More Humane and Profitable

Sheep in Iceland

Home slaughter can be more humane for lambs and more profitable for farmers than sending livestock to slaughterhouses, says Þröstur Heiðar Erlingsson, one of Iceland’s first farmers to implement the practice since it was legalised last spring. According to Þröstur, there is growing interest among both consumers and shops for buying directly from farmers. Þröstur and his wife Ragnheiður Erla Brynjólfsdóttir will provide free instruction on home slaughter to other sheep farmers across the country.

Home slaughter of lambs and goats was legalised in Iceland last spring, as part of a 12-point action plan to support farmers in meeting the impact of the COVID-19 pandemic. Previously, sheep and goat farmers in Iceland were required to send livestock to licenced slaughterhouses. A pilot project and virtual inspections in 2020 and 2021 were part of ensuring that home slaughter would conform to health and safety standards.

Farmers who slaughter at home receive all the offal, the head of the lamb, and the sheepskin, by-products that are most often discarded when livestock are sent to a slaughterhouse, Þröstur says. Farmers can then package and sell products directly to consumers or shops. Þröstur points out that when lambs are slaughtered at the farm, they also do not have to be transported long distances and put in unfamiliar surroundings, which makes the process more humane.

Þröstur and Ragnheiður received a grant to share their experience with other farmers, and will soon provide free instruction on home slaughter in the form of virtual meetings. “We got into this to help farmers, so they don’t have to reinvent the wheel. Now we’ve gained experience, slaughtered at home, and gone through it. We just want to share that knowledge and information with other farmers,” Þröstur stated.

Home Slaughter of Lambs Legalised

sheep lambing Iceland

Minister of Agriculture Kristján Þór Júlíusson has signed a regulation permitting farmers to slaughter their own lambs and goats on their farms and to distribute the meat themselves. Farmers were previously required to send livestock to slaughter at licensed slaughterhouses. The regulation has been in discussion for years and is one part of a 12-point action plan in support of farmers to meet the impact of the COVID-19 pandemic.

“It’s long been called for that farmers be allowed to slaughter sheep and goats on the farms themselves and distribute them on the market,” stated Kristján Þór. “Over the past two years, extensive work has been carried out in consultation with farmers and the Icelandic Food and Veterinary Authority (MAST) to find ways to authorise this production so that it meets food safety requirements and animal welfare and animal health are safeguarded. This change that we’re making today marks a turning point, as this change involves an important opportunity to strengthen value creation and farmers’ profits in the future.”

Last summer, the Minister signed a contract with the chairman of the National Association of Sheep Farmers to conduct a pilot project on home slaughter in the fall. The project went well overall and samples showed good results, though remote monitoring proved a challenge. The regulations, therefore, stipulate that publicly-employed veterinarians carry out health inspections both before and after slaughter, paid for by the state treasury.

MAST has prepared an explanatory booklet for farmers on the new regulation.

The measure should help farmers create more value, which has proven a struggle in recent years. Indeed, there have not been fewer sheep in Iceland since 1861. The relatively low price of lamb and changing consumer tastes are two of the factors that have led to farmers reducing numbers in their flocks or leaving the industry.

Former Slaughterhouse Freezer Gets New Life as Black Box Theatre in East Iceland

A former slaughterhouse in East Iceland that has been converted to a cultural centre will be getting a further makeover this winter, and expanding as a performing arts space as well, RÚV reports. The Fljótsdalshérað Cultural Center, also known as Sláturhúsið (‘The Slaughterhouse’), in Egilsstaðir will soon begin converting what used to be an industrial freezer into a black box theatre with seats for 150 people. The conversion will be partially funded by the Icelandic government.

The former co-op slaughterhouse has two larger freezers, one of which has a very high ceiling and is ideal for a black box theatre. “By its nature, a black box theatre is a very simple space,” explained centre director Ragnhildur Ástvaldsdóttir. “Often we’re talking about a square–black walls and a flat stage. Such that it’s possible to face chairs in all directions. [The freezer] will be well-suited for performances like the ones the National Theater puts on in [its own black box theatre], Kassinn, or that the Reykjavík City Theater stages on its smaller stage.”

The theatre space is just under 250 sq m [2,691 sq ft] and other improvements will be made throughout the facility. The expectation is that the theatre will be able to accommodate 150 guests. The centre hopes to collaborate with other theatres in Iceland, as well as smaller performance troupes in the future. “We’ll be able to invite them to come here and put on performances and to practice as well,” says Ragnhildur.

Slaughtering Season Off to Uncertain Start

Icelandic sheep

The slaughtering season has begun in Sauðarkrókur in Northwest Iceland, RÚV reports, but uncertainty about meat prices has many farmers concerned about their earnings in the coming months.

Those who hold slaughtering licenses set the prices at which meat will be bought from producers each season. But although the slaughtering season is underway or about to begin in most places, license holders still have not announced what purchase prices will be this year. At the beginning of August, the National Association of Sheep Farmers demanded an increase of 132 krónur [$0.96; €0.81] per kilo on last year’s prices, which averaged ISK 600 [$4.35; €3.86] a kilo. Lamb and mutton prices in Iceland have not kept pace with those on the international market and are, in fact, the lowest in Europe. Slaughter license holders are not required to abide by a set reference price but are instead, free to set prices as they see fit at all stages.

“There’s a great deal of uncertainty about this because of COVID,” remarks Unnsteinn Snorri Snorrason, director of the National Association of Sheep Farmers. This is, he continues, both a function of uncertainty about the status of the market as well as how the slaughtering season will fare with staffing shortages in the industry.

Slaughterhouses have predominantly been staffed by foreign workers in recent years, but bringing in workers from abroad is more difficult now during the global COVID-19 pandemic. Finding Icelandic workers for slaughterhouses has proved equally difficult. Thus, these staffing shortages could easily delay the slaughter this year.

See Also: Without Foreign Workers, Slaughterhouses Face Staffing Shortages

“I think people are operating on the assumption that things won’t be as efficient as usual and maybe it’s for the best that people are taking longer,” Unnstein says. “It’s necessary to train staff and get a routine in place … But we don’t have as many of the key people needed to make this happen as we usually do.”

Unnsteinn says that the lamb stock is essentially what it was last year, and although there are fewer tourists coming to the country right now, he doesn’t see this as a reason for lamb production to contract any further than it already has.

“Maybe it’s not a direct result of [fewer tourists], but of course, this has an effect on the market in some way,” he explains. “We also have an opportunity to increase exports, but first and foremost, we need to see higher meat prices. If we don’t see those, then we won’t see an increase in production—rather, we’ll see a contraction in production across the board.”

Still, there is enough demand for prime cuts of lamb on the domestic market, Unnsteinn asserts, “[e]specially now that we’ve considerably reduced production. Just looking at lamb meat, we’ve cut down by some 1100 tons in just a few years. Our biggest market is the domestic one and it has been fairly stable comparatively. We’re getting good results from the foreign markets we’re building, though. And you can’t forget that part of what we’re exporting are inexpensive cuts that we don’t have a market for here in Iceland.”

Without Foreign Workers, Slaughterhouses Face Staffing Shortages

icelandic sheep

Despite rising unemployment throughout Iceland, slaughterhouses throughout the country are having trouble staffing their facilities in advance of the annual slaughtering season, RÚV reports. Slaughterhouses have predominantly been staffed by foreign workers in recent years, but bringing in workers from abroad is more difficult now during the global COVID-19 pandemic.

Iceland’s slaughtering season generally begins in early September and accordingly, slaughterhouses begin advertising for staff during the summer. Slauturfélag Suðurlands, which runs the largest abattoir in Iceland, expects that they will need to extend their season of operation; they are usually staffed by a large group of professional butchers from New Zealand during the slaughtering season but those workers cannot travel to Iceland this year. CEO Steinþór Skúlason says that it is proving difficult to find Icelanders to do this work.

Ágúst Torfi Hauksson, the operations manager at a slaughterhouse in Húsavík, North Iceland is experiencing similar staffing difficulties. He says 35 employees are still needed at his facility. He’d hoped that people who had been laid off from their jobs at the silicon plant in Bakki would apply and indeed, all nine of the former silicon plant employees who have applied for work at the Húsavík slaughterhouse have been given jobs. But that’s only nine applications from a total of 80 workers who lost their jobs.

Fjallalamb in Kópasker, Northeast Iceland still needs 20 employees. “It’s going a lot slower than in previous years because of this COVID situation,” remarked operations manager Víkingur Björnsson. “What I’m trying to do now, as best I can, is to get Icelanders or people who live in Iceland.” Víkingur hasn’t had much luck with this yet, however. “I’m a little surprised. There’s a fair amount of unemployment in the country. This is, of course, not long-term [work], just six weeks, but still.”