Iceland's Dairy Industry: A Comprehensive Analysis

Overview

Iceland is renowned for its strong dairy sector, which plays a crucial role in its agricultural economy. Despite facing challenges from international trade dynamics, such as embargoes, the country maintains a steady dairy production framework.

Milk Production and Dairy Cattle

As of the latest data, Iceland has approximately 70,000 dairy cattle, contributing to an annual milk production volume of around 145 million liters. This demonstrates Iceland's commitment to high standards in dairy farming.

Dairy Processing and Cheese Production

Milk processing in Iceland is highly advanced, with facilities capable of handling the entire production volume. The country produces approximately 10,000-12,000 tons of cheese annually, a staple in the Icelandic diet, known for its unique flavors with international appeal.

Production of Milk Powder and Whey

Iceland produces an estimated 2,000-3,000 tons of milk powder and whey each year. These products are essential for both the local market and exports, significantly contributing to the national economy.

Key Enterprises in the Dairy Market

Leading the Icelandic dairy market are key enterprises such as MS Iceland Dairies and Fjallalamb. These companies are pioneers in dairy innovation and production within the country.

Dairy Farms

Primarily family-owned, Iceland's dairy farms operate on a small to medium scale, emphasizing sustainable practices and prioritizing the well-being of their dairy cattle.

Export and Import of Dairy Products

Despite fluctuations due to international embargoes, Iceland exports dairy products worth approximately 15 million USD annually. Imports are valued at around 5 million USD, focusing on complementing domestic offerings.

Dairy Market Events

Recent events impacting the Icelandic dairy market include adjustments in trade policies due to international embargoes, affecting import and export dynamics. Despite these challenges, Iceland focuses on strengthening its dairy industry internally, with initiatives aimed at improving sustainability and product diversification.

National Initiatives

Iceland's 2023 national food policy emphasizes sustainable practices, animal welfare, and carbon neutrality by 2040. Although the number of farms has decreased by 77% over 40 years, production has increased by 42%, showcasing resilience and innovation.

Modified: 2025/05/18


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