The Baalands: Icelandic Agriculture

September 2025 -- Icelandic agriculture is dominated by livestock, particularly sheep and hay production. Sheep have been the traditional mainstay for generations. There are about 1500 sheep farms in Iceland. Estimates for the number of breeding ewes varies, though it has been declining steadily over the past several decades. Though agriculture is changing, sheep are part of Icelandic's national identify and remain an important part of rural economies.

Sheep have sustained Icelanders for generations.

There is only one breed of sheep, goat, cattle, and horse.

Cattle raising increased in the 20th century, especially dairy. Horses were traditionally important for agriculture, but have been replaced by modern machinery. Modern innovation allows the cultivation of vegetable crops in geothermal greenhouses. Greenhouses and fish farming are the fastest growing sectors of Icelandic agriculture.

The role of Icelandic horses has changed.

Only 1% of land is under arable cultivation.

Cattle are raised mostly in the lowlands.
There just under 600 dairy farms in Iceland.
There aren't many goats in Iceland.

High tariffs and import restrictions protect domestic product, especially form non EU-countries. Icelandic agriculture is heavily subsidized. Subsidies can represent a significant portion of the farmer's income and are designed to support production, maintain farm incomes, and protect domestic production. More recently, some subsidies have been linked to more sustainable land use. Despite subsidies, rising costs are making some segments of Icelandic agriculture increasing less viable.

Iceland in self-sufficient in meat, dairy, and eggs.

Harvesting

Fresh cut

As of 2022, there were 2513 farms in Iceland. Sheep farms are the most prevalent, followed by dairy. Poultry production surpassed lamb meat production for the first time in 2022. The industry is dominated by a few large companies, with only 23 broiler farms in Iceland. There are about 10 egg farms in Iceland. Egg farms are moving towards being all cage-free. Almost all the grain fed to the poultry must be imported. Iceland both an importer and exporter of poultry products.