Profitability of reindeer husbandry slides in 2018-19

The entrepreneurial income from reindeer husbandry decreased to EUR 7,000 during the 2018-19 herding season, down by a quarter from the previous herding season, according to the Natural Resources Institute Finland (Luke).

The profitability ratio decreased from 0.4 to 0.31, meaning that entrepreneurial income covers 31% of the targeted compensation for the work performed by entrepreneur families and the capital invested in enterprises.

Sales revenues decreased by one per cent to EUR 20,400. Direct sales of reindeer meat cover more than half of the total revenues.

Compensation for work paid by reindeer herding cooperatives decreased by 12% to EUR 5,200. Correspondingly, compensation paid for traffic accidents and predator incidents involving reindeer decreased from EUR 7,600 to EUR 6,500.

The share of subsidies increased by 13% to EUR 6,300. Subsidies account for roughly 15% of total returns on reindeer husbandry. Compared with the previous herding season, total returns decreased by more than two per cent to EUR 40,100.

During the 2018-2019 herding season, production costs increased slightly from the previous year and were EUR 54,200. Machinery repair and operating costs increased the most, but the costs of purchased feed decreased by three per cent.

“Weather conditions in the winter were favourable and the reindeer had good access to food. This likely decreased the need to provide supplementary feed for the reindeer”, said Marja Vilja, research scientist of Luke.