DAIRY farms will be able to produce more milk on less fodder with the help of new research findings.

But the discovery may not be welcomed among consumers.

Scientists at the Dairy Futures Co-operative Research Centre have genetically modified a ryegrass to have bigger yields and boosted energy.

Chief scientist German Spangenberg said that by altering the plant's genes, it was possible to produce up to 80 per cent more grass. He hoped this would be available to farmers within the next 10 years.

"It is highly nutritious, which will lead to an increase in production," Prof Spangenberg said.

"It will provide more milk with less grass, because of the energy content, and will not affect the quality at all."

Prof Spangenberg said all the genetic hurdles to produce the grass had been overcome, but there was still more testing to be done.

The ban on genetically engineered crops was lifted in Victoria during early 2008 and Prof Spangenberg said most farmers had come to be supportive of the new technology.

But when the ryegrass crops are ready to be put on the market, there may be strong resistance.

Greenpeace Australia genetic engineering team leader Laura Kelly said her organisation would oppose products that had encountered genetic modification in the food chain until they were proved safe for human consumption.

"Studies show GM feed alters the animals that eat it," Ms Kelly said. "Currently there is no testing to determine the impact eating transgenic DNA has on us."

Ms Kelly said that before the ryegrass reached the marketplace it should be independently tested.

She said the labelling of products from animals fed on GM crops was an important issue.

"Opinion polls show 90 per cent of Australians want GM labelling," Ms Kelly said.

The Dairy Futures CRC was officially opened last month, however work at the research facility, at Bundoora, began in January.