AgResearch says it's likely to be another 18 months before researchers develop the institute's first genetically modified high-fat ryegrass variety.
As well as having a high energy content, the grasses are aimed at improving the animals' productivity, while producing healthier meat and milk.
Low energy grasses have recently proved problematic in the North Island.
Farming consultants say heavy rains have produced high water content in pastures, affecting the ability of dairy cows to absorb nutrients, as well as their fertility.
The new research, which has been funded by the Foundation for Research Science and Technology, is looking to produce grasses which contain tiny droplets of oil in the leaves to provide more energy for the animal.
Applied biotechnologies general manager Jimmy Suttie says test crops are only half way so far towards a goal of a total fat content of 8%.
He says another possible benefit of the research is the lower methane emissions that may come from the livestock as a result of the process.
The next phase in the research is to feed the grasses to livestock to test the research.