The old ones couldn't be choosy,
but that has changed
The Iceland sheep are of the Northern European short-tailed sheep breed, brought there by the settlers. Most of them are horned.
A part of the old Icelanders were fishers, eating mainly fish and sea mammals. A larger fraction of the Icelanders was farmers. Their main source of food was sheep, but they had dairy products and grains were grown. (From the time of settlement on, the climate became progressively colder up to the "Little Ice Age" lasting roughly 1350–1850. After year 1900 the average temperature increased again.)
Today export of fish and fish products are important contributions to the economy. Farmers still supply the home market with meat, chiefly lamb, and dairy products. In greenhouses heated by geothermal water and illuminated by cheap electricity, tomatoes, cucumber etc. are produced. But cereals are mostly imported. So what can we expect visiting Icelandic restaurants?
Icelandic lamb is special. It's a thousand years old race and the pastures are special. Maybe it's the latter, but I don't know the exact secret of the great taste.
Next in line – or maybe first in line – come all kinds of fish; like cod, halibut, arctic char and salmon caught in the wild (much better than farmed salmon).
Then let's proceed to the special foods, some traditional, some controversial, and some tasting bad to many tourists:
Illustration from the great Héraðsvötn (Skagafjörður) river delta. Horses are for riding, both sport, leisure and sheep roundup, for export, for meat, and as one of my sources put it, for nothing at all! This breed is harden for more than a thousand years, grazing all year. Some has this special gaits, and a lot of horses are exported. For protection against illnesses, no horses are allowed imported. (An extra picture on the 1920×1080 page.)
You may sometimes be offered horse meat in restaurants. It's tasty, although slightly sweetish. Many horses are raised for meat and some is exported to Japan. Unfortunately this is taboo food for a lot of people.
There are wild reindeer in the north of the country, once brought here from Norway. This might also be taboo food for some Americans (can't eat Rudolph), but it is very tasteful for those who likes the taste of the wild.
Whale meat is also controversial, but forget that, just enjoy it!
Also, the Icelanders really know how to smoke meat and fish, like nobody else. The smoke may come from slowly burning birch, willow etc. (which was often scarce here), but the special and strong favor comes from burning - oh, you might not want to know, so you may skip the rest of this paragraph. They sweep up dung, dried urine, straws and whatever has accumulated on the floor of the sheep pen and dry it, then burn it in the smokehouse. In spite of what it sounds, there is nothing unhygienic about it, and the result is marvelous, at least if you like strong tastes.
Do you know the (Atlantic) puffins (Fratercula arctica), also called sea parrots? Icelanders eat them and you can get them in restaurants, but if you're hungry, select another dish.
One of the most tasty dishes I found in this country was hverabraud (=hot-spring-bread) with creamed butter and smoked Arctic char. Hverabraud is rye bread cooked at 100°C for 12–24 hours in a box buried close to a hot spring.
Like some other Scandinavian countries Iceland has its fermented fish tradition. Sweden has its surströmming (fermented Baltic Sea herring), Norway has its rakørret (fermented freshwater trout), and Iceland has its hákarl (fermented Greenland shark). In each countries it's now special feast food, and it's usually served with beer and schnapps (although many Swedes say they prefer milk with surströmming). In contrast to the Swedish and Norwegian tradition which were means of conserving the fish, the Greenland shark was buried in the beach sand to rot (ferment) to make it edible for humans.
[What I haven't tried yet is the ammonia (etc.) reeking kæst skata (skate having been buried and fermented), served with potatoes and rancid sheep fat on Þorláksmessa (St. Thorlakur's Day) 23 December. To preserve the indoor olfactory environment for Christmas, the party often take place in a shed or garage.]
In Iceland booze and strong beer (above 2.25 percent alcohol) can be bought only in restaurants and bars, and in the government shops called Vínbúðin. Because this is a "big" town (Höfn, 1800 inhabitants!) the opening hours are quite long. Although all kinds of liquor are available, the traditional kind must be mentioned: Brennivin, 37.5 percent alcohol favored with caraway and nicknamed Svartidauði (=black-death). More than twenty-five years ago strong beer was prohibited and people often added booze to the (light) beer. The ban was lifted on 1. March 1989, and the first of March is now the very celebrated Beer Day!
As in many countries now, smoking is forbidden inside public buildings and transport, and shivering smokers on doorsteps risking pneumonia may be observed. And unlike Sweden and Norway, the Scandinavian snus (tobacco placed under the lip) is banned inside the wet borders of the Republic of Iceland
Sorry, no Icelandic dish snapshots! (This is Norwegian wild strawberries.)