The price paid to dairy farmers on Terceira and Graciosa has fallen again, with Terceira producers receiving an average of 38 cents per liter in September. Agricultural leader José António Azevedo warns that rising production costs, repeated price reductions and the persistent gap with mainland Portugal are pushing farmers toward discouragement—and some toward abandoning dairy altogether.
A liter of milk begins long before it reaches a supermarket shelf. It begins before dawn, in pastures exposed to Atlantic rain and wind, in milking parlors that cannot close for weekends or holidays, in machinery that requires fuel, animals that must be fed every day, land that must be maintained and farms that must continually invest simply to remain viable. Its retail price may be measured in cents and euros, but behind every liter lies something more difficult to calculate: time, land, risk, inheritance and the stubborn continuity of agricultural life on an island.
On Terceira, that equation has become increasingly difficult to sustain.
After reductions already implemented on São Miguel, the price paid to milk producers has now fallen on Terceira and Graciosa as well. On Monday, Unicol informed farmers on the two islands that the producer price would decline by 1.5 cents per liter beginning September 1.
It is already the second reduction of 2026, following a three-cent cut in February that prompted protests among producers.
For José António Azevedo, president of the Terceira Island Agricultural Association (AAIT), the latest decrease is not simply another unfavorable movement in an agricultural market. He describes an industry approaching the limits of economic viability.
“Milk producers already had no margin whatsoever to produce milk, considering the increase in production costs, including fuel and concentrates,” Azevedo said. “With the reduction in the price paid to producers, at this moment it is impossible to produce milk under the proper conditions.”
Thirty-Eight Cents for a Liter
The figures are stark. Terceira dairy farmers received an average of 39.9 cents per liter in August. In September, that figure falls to approximately 38 cents. According to Azevedo, it is “the worst price paid in Europe.”
Whether viewed as a European comparison or simply through the economic reality confronting an individual farm, the underlying problem is the same: producers argue that the price they receive is moving in the opposite direction from many of the costs required to produce the milk.
Fuel must still be purchased. Animal feed must still arrive. Machinery must still operate and be repaired. Veterinary care, fertilizer, electricity and labor do not become cheaper merely because the processor reduces what it pays for the final product.
Agriculture possesses few places where a farmer can simply decide not to spend. A dairy cow must be fed whether the market is favorable or disastrous.That biological reality makes dairy farming particularly unforgiving.
Ten Cents Across the Same Country
Azevedo is especially critical of the continuing difference between what Lactogal pays producers in the Azores and in mainland Portugal.
Pronicol, which is 51 percent owned by Lactogal, followed the pattern of other São Miguel processors that reduced milk prices during August and September. According to the AAIT president, Lactogal continues to maintain a differential of approximately 10 cents per liter between Azorean and mainland producers.
For Azevedo, the present moment should have been used to narrow that difference. “This would have been the right time to reduce that differential,” he argued. “It would have been enough simply to maintain the milk price in the Azores.”
The frustration becomes greater, he says, because producers do not believe previous improvements in dairy markets were adequately reflected in what farmers received.
“Markets have been much worse in terms of the commercialization of dairy products,” he said, noting signs that prices are beginning to reverse direction again. “If milk increased when it should increase, we would understand the decrease. But it doesn’t increase.”
That sentence exposes one of the oldest tensions in agricultural economics: farmers frequently experience increases in their costs immediately while improvements elsewhere in the commercial chain may take longer—or, from their perspective, fail altogether—to reach the farm gate.
When Discouragement Changes the Landscape
The most troubling number, however, may not be 38 cents. It may be the number of farmers quietly wondering whether they should continue producing milk at all.
Azevedo describes “total discouragement” among Terceira’s dairy producers and says an increasing number are considering changing agricultural activity, particularly from dairy to beef production.
Evidence of that shift is already visible. During the most recent program allowing dairy farms to convert to beef production, the available conversion rights on Terceira were exhausted. If another application period opened now, Azevedo believes demand would be even greater.
That development deserves attention far beyond the agricultural sector.
When a dairy farm disappears, what is lost is not merely a quantity of milk. Agricultural landscapes change. Processing industries lose suppliers. Rural employment contracts. Knowledge accumulated within farming families becomes less likely to pass to another generation. Pastures that helped define the visual geography of an island begin acquiring another economic purpose. An industry can therefore decline long before a factory closes. It declines one farmer at a time.
European Money That Farmers Cannot Afford to Receive
There is another contradiction troubling the agricultural association.
European agricultural programs are intended to encourage modernization, competitiveness and investment. Yet Azevedo warns that some farmers are now in such a fragile financial position that they may struggle to provide their own share of investments even when projects receive European co-financing.
He points specifically to projects under PEPAC—the Strategic Plans of the Common Agricultural Policy. Some investments have already been approved and others remain under evaluation, but producers may lack the financial capacity required to proceed.
In other words, a farmer can have an approved modernization project and still be too economically weakened to modernize. That is a dangerous threshold for any agricultural sector. Investment is not a luxury in dairy farming. Facilities age. Technology evolves. Environmental and animal-welfare requirements increase. Efficiency becomes essential when margins narrow. A farm unable to invest today may become a farm unable to compete tomorrow.
The Value of an Azorean Liter
The debate surrounding the latest price reduction ultimately raises a question larger than the commercial value of milk.
What is dairy farming worth to the Azores?
For generations, cattle and pasture have been woven into the economic and cultural landscape of the archipelago. Dairy production helped sustain rural families, created cooperatives and industries, shaped land use and placed Azorean milk, butter and cheese within markets far beyond the islands.
But tradition cannot pay an electricity bill.
No agricultural sector survives indefinitely because it is historically important. Farmers remain on the land only when there is enough economic dignity in doing so—enough margin to maintain a family, renew equipment, invest in the farm and imagine handing something viable to the next generation.
That may be the deeper warning contained in September’s 1.5-cent reduction.
A cent and a half appears insignificant when held in the hand. Multiplied by thousands of liters, repeated across months, and added to February’s three-cent reduction, it becomes something entirely different. It becomes lost income on farms already operating under pressure.
And eventually economic arithmetic becomes human arithmetic: another farmer converts to beef, another postpones an investment, another son or daughter decides there is no future in dairy farming.
The danger is not simply that Terceira may produce less milk. It is that, little by little, the island may produce fewer milk producers. A liter can be priced at 38 cents. What cannot so easily be priced is the pasture kept alive, the farm passed between generations, the morning milking before sunrise, or the decision of a family to remain on the land. Once those disappear, raising the price of milk may no longer be enough to bring them back
Based on a news story in Diário Insular-José Lourenço, director. Phtos from DI and Associação Agrícola dos Açores.