Total profit for the five primary agricultural sectors in Iceland improved significantly in 2021. In total, earnings (net income before tax) tripled to 2.1 billion ISK compared with 692 million ISK in 2020. This was largely due to a turnaround in sheep farming where earnings amounted to 677 million ISK compared with a loss of 94 million ISK in 2020. Profits in cattle farming also doubled to 883 million ISK and fur farming returned a profit for the first time since 2013.

Total revenue grew by 6% to nearly 51 billion ISK, having been 48 billion ISK in 2020 and relatively stagnant since 2015. In terms of percentages, revenue grew most in fur farming – doubling from 290 million ISK to 572 million ISK – but operating expenses in the sector grew by only 30%, causing the 2021 reversal in earnings. Measured in ISK, however, sheep farming had the most impact on revenue – growing by 1.5 billion ISK from 12.3 billion ISK in 2020 to 13.9 billion ISK in 2021. Total operating costs in the sector increased by only 7% which again explained the profits earned in the sector. Dairy farming was nonetheless the largest sector in agriculture with revenues of 26.8 billion ISK in 2021 (unchanged from a year ago) and nearly twice the size of sheep farming, which ranked number two.

Despite the growth in revenue and significant rise in earnings, the total number of farms continued to decline in 2021 with every sector but fur farming experiencing a decline in the number of operating entities. Overall, the number of entities fell by 3% (80) from 2.433 in 2020 to 2.353 in 2021, most in sheep farming, or by 56 (4%) from 1.436 to 1.380. Since 2008 the number of sheep farms has dropped by 20%. The number of dairy farms fell by 3% (from 662 to 644) and since 2008 it has decreased by 8%, with the majority happening in the last four years. The number of other cattle farms also decreased between years, from 89 to 84 or about 6%.

Unlike other agriculture sectors the number of entities in growing of crops and plant propagation has stayed relatively unchanged since 2008, albeit with some yearly swings. The total number of operators in the sector declined by 2%, but two sub-sectors – growing of fruit-bearing vegetables and growing of other crops – had a stellar year with increased number of entities and significant improvements in earnings. However, the other sub-sectors didn’t fare as well causing the overall results for the sector to be relatively muted.

Geographically, the number of farms declined most in the Eastern region, by 7% (from 225 to 210), but otherwise the decline was fairly evenly spread across the country. Most farms in Iceland were located in the Southern region, totalling 537 but still 16 fewer in 2021 than the previous year. In total, the number of operating entities in agriculture has declined by 16% since 2008.

Financial position of the five sectors in agriculture improved in 2021 as long-term debt increased by only 1% and total equity grew by 15% due to significantly improved profits. Therefore, the debt-to-equity ratio declined from 628% in 2020 to 551% in 2021. Financial position improved most for dairy farms and especially fur farms where the turnaround in operating results led to great improvements in equity. On the other hand, financial position worsened for other cattle farms with the debt-to-equity ratio increasing from 370% in 2020 to roughly 600% in 2021 due to further losses and increased debt. Nonetheless, the overall financial position of agriculture in Iceland has generally improved in most years since 2014.

Revenue: Breakdown of revenue was discontinued in 2017 due to cessation of the RSK 1.09 tax statement in 2016 that detailed revenue segments.

Classification: Farms with mixed operations are classified according to their revenue, e.g. if the majority of a farm’s revenue comes from sheep farming it is considered to be a sheep farm even though it has significant dairy farming or cattle operations as well.

Number of farms: Data on the number of farms includes all types of tax-filing entities operating in the sector. The data can include entities that had no revenue in the year and only assets or liabilities.