The head of the country's biggest farming operation says New Zealand farm animals are not producing as much as they could because they are under-fed.
Landcorp chief executive Chris Kelly says that's because genetic gains made in breeding so animals can produce more have not been matched by pasture improvements.
As a result, farmers will find that by reducing stock numbers they can actually increase production.
Mr Kelly says that because of the grass species used at present, animals are not fed to their genetic potential. "I often liken it to the fact that we now have V8 Ferraris which we're running on 91 octane."
He says a remarkably good growing season because of the weather, such as this year, leads to an increase of 10% in scanning results not through genetics but better feeding.
Mr Kelly says Landcorp is starting to hold back on the number of animals it is putting on farms and is feeding them a bit better in the hope they will "express their potential genetic worth".
About two thirds of the way through the season Landcorp has found that some cows are producing half as much milk as others.
"We take them out of the herd, so we might drop our herd numbers by 2 - 3%, we actually get an increase in production because the remaining animals are fed better. That increase can be as high as 3 or 4% - so less cows but actually more milk".
Mr Kelly says Landcorp is taking the same approach to sheep and having fewer sheep which are being better fed which leads to higher scanning results, better lambing results and more lambs on the ground.
Mr Kelly says opportunities to develop better pasture are not being taking up because of a bias against the use of biotechnology.
He says clinical trials of a drought-resistant gene in rye grass that can give a 20% production boost are being carried out in Australia, because approval could not be obtained in New Zealand, though the product was developed in this country.