The Azores — a Portuguese archipelago of nine volcanic islands in the middle of the Atlantic Ocean, accounting for 2.5% of Portugal's surface area and 2.2% of its population — has developed one of Europe's most distinctive pasture-based dairy models, one that differs significantly from the confinement systems commonly found across many European regions. Dairy farming is a cornerstone of the local agricultural economy, representing around 70% of the archipelago's total agricultural activity.
Thanks to its volcanic soils, humid Atlantic climate and year-round grass growth, the Azores have become a major milk-producing territory, accounting for more than 30% of Portugal’s total milk production despite their limited land area.
Today, Azorean milk producers operate within a highly strategic agrifood sector that combines grazing systems, increasing sustainability demands and growing opportunities for premium dairy products. As global consumers become more interested in grass-fed milk, animal welfare and low-input farming systems, the Azores are increasingly attracting attention as a potential model for sustainable dairy production.
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Why is the Azores ideal for milk production?
The success of dairy farming in the Azores is connected to its geography and climate. The islands benefit from mild temperatures throughout the year, high rainfall levels and fertile volcanic soils that support continuous pasture growth. Unlike many continental dairy regions that depend heavily on stored silage or concentrate feed during dry seasons, Azorean dairy farms can maintain grazing systems for most of the year.
Although São Miguel represents around one third of the Azores’ total land area, it accounts for the majority of the archipelago’s milk production, highlighting the island’s central role in the regional dairy industry. However, dairy farming remains economically and socially important across several islands in the archipelago.
How does pasture-based milk production work in the Azores?
One of the main characteristics of Azorean milk production is its reliance on grazing systems. Dairy cows are commonly managed under rotational grazing strategies that optimize pasture use while working to maintain forage quality and soil productivity. This strategy can reduce feed costs and improve resource efficiency. Scientific studies also associate grazing systems with lower risks of lameness and metabolic disorders. The downside is lower productive efficiency. As you know, there are always trade-offs.
The “grass-fed” image of Azorean milk is increasingly important in modern dairy markets. Consumers across Europe are paying greater attention to how milk is produced, including concerns related to sustainability, animal welfare and environmental impact.
Is Azores milk sustainable? Understanding its carbon footprint
Sustainability is becoming one of the most important competitive factors in the global dairy industry. Studies suggest that the pasture-based dairy systems used in the Azores may offer environmental advantages compared with other production models, particularly through their strong reliance on grazing systems, although enteric methane emissions remain a key sustainability challenge for the sector. Enteric methane emissions from cattle continue to represent the largest environmental hotspot. In addition, the geographic isolation of the islands creates logistical challenges associated with transporting milk and dairy products to export markets and mainland Portugal. These transport costs can affect both economic competitiveness and environmental efficiency.
What are the main challenges for Azores milk producers?
Despite its production system advantages, the Azorean dairy sector faces several structural challenges. The industry has historically depended heavily on commodity milk markets, making producers vulnerable to fluctuations in global milk prices.
Geographic isolation also increases operational costs related to transportation, energy, and supply-chain logistics. For many producers, profitability depends on improving efficiency while simultaneously increasing product value.
As a result, many experts argue that the future of the Azores dairy industry will depend on moving beyond bulk milk production toward higher-value dairy products.
What premium dairy products come from the Azores?
Beyond fresh milk, the Azorean dairy industry produces a wide range of derivatives including cheese, butter, yogurt, and other processed dairy products. This product diversity allows producers to maximize the value of their milk output and serve different market segments and consumer demands.
One of the strongest opportunities for the Azorean dairy sector lies in premium dairy branding. Traditional cheeses such as São Jorge cheese already demonstrate the value of linking dairy products to regional identity, grazing systems, and cultural heritage.
Protected Designation of Origin products help create differentiation in increasingly competitive dairy markets. Growing consumer interest in grass-fed dairy products, sustainability claims, and regional food systems may further strengthen the international positioning of Azorean dairy products.
Within this valuation framework, some examples of value-added dairy products can be found:
Happy Cows Program
Created in January 2015, the "Happy Cows" program certifies "pasture milk" produced by cows that meet approximately 229 requirements and undergo an independent audit process. Built on five pillars — pasture, animal welfare, food quality and safety, sustainable production, and efficiency — the program offers premium-quality milk at a higher price point, targeting consumers who value animal welfare and responsible production.
Organic Milk from Terceira Island
Terceira Island produces certified organic milk from animals that graze 365 days a year. The milk provides a natural source of calcium with high protein and low fat content. Participating farmers receive an additional payment of approximately €0.10 per litre, and pastures must undergo a minimum two-year period free of herbicides and fertilizers before certification.
The future of Azores milk production
The future of milk production in the Azores will likely depend on balancing sustainability, economic resilience and market differentiation. Climate change, evolving environmental regulations, and changing consumer expectations are reshaping the European dairy sector.
In this context, the Azores possess several strategic advantages:
- Year-round pasture production
- Strong grass-fed identity
- Relatively low-input farming systems
- High animal welfare perception
- Strong territorial branding potential
Nevertheless, maintaining competitiveness will require continued investment in innovation, logistics, sustainability monitoring, and value-added dairy products.
The Azores therefore represent far more than a traditional milk-producing region. It is increasingly viewed as an important example of how pasture-based dairy farming can combine environmental performance, regional identity, and agricultural resilience within modern European food systems.
Conclusion
The Azorean dairy industry is a unique and crucial sector for the region's economy. Thanks to favorable natural conditions and an extensive grazing system, Azorean milk and its derivatives are recognized for their high quality and sustainable practices. To face economic challenges, producers have sought to add value to their products, such as through the "Happy Cows" program, the production of organic milk and the offer of cheeses with Protected Designation of Origin (DOP). These strategies have helped differentiate the local industry, conquer markets both on the Portuguese mainland and in tourism, and strengthen the image of dairy products from the Azores as synonymous with quality, animal welfare and environmental responsibility.
References
Beatriz Maria Pinho de Almeida, Milk Production’s Sustainability Case Study: Azores. 2019.
A. M. de Almeida, P. Alvarenga, and D. Fangueiro, “The dairy sector in the Azores Islands: possibilities and main constraints towards increased added value,” Trop Anim Health Prod, vol. 53, no. 1, p. 40, Mar. 2021, https://www.doi.org/10.1007/s11250-020-02442-z.
B. A. da S. Almeida and E. L. D. G. S. da Silva, “A Eficiência das Explorações Leiteiras Micaelenses (Açores),” Revista de Economia e Sociologia Rural, vol. 53, no. suppl 1, pp. 129–142, Mar. 2015, https://www.doi.org/10.1590/1234-56781806-94790053s01010
Almeida, J. et al. (2020). The Dairy Sector in the Azores Islands: Possibilities and Main Constraints Towards Increased Added Value. https://link.springer.com/article/10.1007/s11250-020-02442-z
Dairy4Future Project Reports (2022). Dairy Sector Analysis in the Azores. https://dairy4future.eu/wp-content/uploads/2022/09/D4F-WP4-DAIRY-SECTOR-IN-AZORES.pdf
European Parliament (2015). Agriculture of the Azores Islands. https://www.europarl.europa.eu/RegData/etudes/STUD/2015/567667/IPOL_STU%282015%29567667_EN.pdf
Medeiros, B. et al. (2021). Production and Health Management from Grazing to Confinement Systems. Animals, 11(12), 3394. https://www.mdpi.com/2076-2615/11/12/3394
Morais, J. et al. (2018). Carbon Footprint of Milk from Pasture-Based Dairy Farms in the Azores. Sustainability, 10(10), 3658. https://www.mdpi.com/2071-1050/10/10/3658
Nunes et al. (2025). Insights into Enteric Methane Emissions in Conventional and Organic Dairy Grazing Systems in Island Regions. Sustainability, 17(11), 4944. https://www.mdpi.com/2071-1050/17/11/4944
Silva et al. (2016). Dairy Farming Systems’ Adaptation to Climate Change. https://repositorio.uac.pt/entities/publication/fbacaaae-652f-4ed8-a8ce-a74724430ac9
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