At a media day at its Ruakura campus, near Hamilton, AgResearch manager of applied biotechnology Jimmy Suttie said its initial focus was the production of transgenic proteins for health supplements or to treat sick people, but it was keeping future options open.
Herds of 40 or 50 cows could supply enough protein for those markets and farms were likely to also need some form of milk processing capacity so the only transgenic product leaving a farm would be milk powder or something similar.
Dr Suttie said the first transgenic medical protein had been approved in Europe.
Atryn, an anti-blood clotting product, was developed from the milk of 100 transgenic goats run on the East Coast of the United States.
AgResearch's reproductive technologies section manager Vish Vishwanath said that number of goats could be sufficient to meet world demand and was an indication of how farming transgenic cows would be a niche industry.
The 45ha Ruakura field containment unit runs 109 transgenic dairy cows which were genetically modified (GM) to produce extra casein protein, myelin basic protein and human lactoferrin.
Foreign proteins in milk can produce about two grams a litre.
Dr Suttie said there had been no animal health issues associated with the genetic modification technology or horizontal genetic transfer, where genes allegedly change structure, as opponents of the science have claimed.
He said there had been high death rates from embryo cloning, the cutting or grafting of a group of cells of the same genetic constitution that are descendant from the same parent, but this had nothing to do with GM.
Dr Suttie said the science of cloning was not perfect but AgResearch was improving survival rates.
Approvals from the Environmental Risk Management Authority (ERMA) for the containment farm end later this year and in 2010, and AgResearch was seeking a renewal of those existing plus new licences.
That includes working with other ruminants in containment and to begin discussions with regional authorities and iwi to establish other containment facilities around New Zealand.
AgResearch hosted media in a bid, they said, to correct misinformation and scaremongering from opponents of GM ahead of the hearing of its applications next year.
The 45ha farm is double-fenced to a height of 2m, with alarms - to keep the animals in and people out.
It can carry 200 cattle and at present has 109 transgenic and 74 conventional surrogate cows.
The facility's manager Tim Hale, said no animals left the unit except with special permission and only then to another containment unit.
Any surplus to requirements were euthanased and buried on site, as per regional council requirements.
Other than the external fences and restricted entry, the unit was like any other research farm.
The dairy shed was small but would not be out of place on any other dairy farm and there was another set of covered yards with a concrete floor with small pens and a crush for research purposes.
Every three months MAF Biosecurity inspects and audits the farm and all research is approved by an animal ethics committee, including people from AgResearch from outside the the science company.
Mr Hale said milk was irrigated back on to the pasture, as per local authority regulations.