A meeting between farmer representatives and the Livestock Improvement Corporation over defective semen it sold to 900 dairy farmers has failed to resolve a deadlock over the issue of compensation.
About 3000 female offspring of a dairy bull, Matrix, have turned out to be hairy, heat intolerant and poor milk producers.
LIC has agreed to pay farmers the costs of inseminations and semen.
But Federated Farmers' dairy chair Willy Leferink says that is not good enough and met with the company earlier this week to push for more substantial compensation.
Mr Leferink says he feels that no headway was made towards reaching a good outcome and said it was doubtful the parties would meet again until there was some "mellowing of views".
He says farmers want "reasonable compensation" of between $300 and $500 per calf.
"They don't want to talk about inseminations, and LIC want to talk about inseminations - they don't want to talk about calves - and that's where the hiccup is."
South Waikato farmer Craig Littin bought Matrix semen and now has eight heifer calves with the genetic defect which he says should have been worth about $1200 each.
Mr Littin says LIC has been too slow to act and, though he understands the mutation is naturally occurring, that does not mean LIC can wipe their hands of it.
Craig Littin says affected farmers have formed a group and are seeking legal advice.
LIC has previously said there has only been two genetic defects among its 9000 bulls over the past 50 years, and other genetic companies do not pay compensation for naturally occurring mutations.
Chairman Murray King says it is now a matter for direct communication with shareholders and customers.