On the other hand, export revenues were far stronger in 2024 than in 2023. Total revenues from farmed fish exports came to ISK 53.8bn in 2024, up from ISK 48.8bn three years earlier, an increase in value of 10%. Thus 2024 was the sector’s strongest revenue-generating year on record.

The price of farmed fish has developed rather favourably in the recent term. According to data utility LSEG-Datastream and our own calculations, the price of fresh Norwegian farmed salmon has risen by approximately a third in ISK terms in the past five years. It should be borne in mind, though, that the cost of inputs for the sector – feed in particular – has also risen sharply. Furthermore, prices fluctuate markedly from one point in time to another, as the chart shows.

Demand for farmed fish, especially salmon, looks set to be robust, and the outlook for prices is likewise favourable. The growth of the global middle class appears likely to foster increased demand for salmon and other seafood. At the same time, the outlook is for supply to grow more slowly in coming years than it has in the past, according to the website SeafoodSource.

Various-sized fish in various-sized ponds

Salmon and trout dominate among Iceland’s farmed fish species, yet Iceland’s share in European production of the same species varies. Although salmon constitutes the majority of aquaculture output in Iceland, in a larger context we are merely a little fish in a big pond, as it were. The Norwegians are biggest by far, accounting for 84% of European salmon farming in 2023. Next in line were the British, and third were our cousins the Faeroese, who produced about twice as much volume as Icelanders.

In terms of farmed trout, however, Iceland is the European leader by a comfortable margin, with a share roughly the same as Norway’s share in salmon farming. Trout farming is far smaller in scale than salmon farming, though, and on that front we can say that Iceland is the biggest fish is quite a small pond.

Farmed salmon overtakes capelin

The past two years’ consecutive capelin season failures have been a frequent topic of discussion in the Icelandic fishing industry. Obviously, the back-to-back catch failures have hit total revenues in the sector quite hard, particularly in regions that concentrate on capelin fishing. During strong seasons, capelin has been Iceland’s second-most valuable marine product, exceeded only by cod in terms of total export value.

It is therefore interesting to compare the current scale of aquaculture products with the scale of capelin a few years back. As the chart indicates, the export value of farmed salmon has mushroomed in the past decade. In 2019, salmon edged past capelin for the first time, as that year’s capelin season was relatively weak. Capelin then rebounded early in the 2020s, but in the past two years salmon has returned to second place in terms of export revenue generation. Given the aforementioned capelin catch failures, this is no surprise.

But aquaculture appears to be positioned for continued growth in the coming term. This is due mainly to land-based fish farming, as large-scale salmon farms are being developed in several locations around the country. In our macroeconomic forecast, published in late January, we projected that farmed fish would account for a large share of growth in marine product exports over the forecast horizon. We assume an increase of 10% increase per year in aquaculture product exports in 2025 through 2027, and estimates from the companies concerned suggest that this forecast is relatively conservative.

Most indicators imply that farmed salmon will establish itself as Iceland’s second-most valuable fish export, and if aquaculture companies’ long-term plans materialise to any significant degree, salmon could even start to nudge cod out of the way in the 2030s.