About 200 dairy farmers and supporters gathered to celebrate the opening of the Southern Dairy Hub in Southland on Friday.
Conversion of the 349ha property at Makarewa, near Invercargill, began in November last year and the hub is now operational, with research under way and calving due to begin.
The official opening, by Environment Southland chairman Nicol Horrell, was an ''important milestone'' for the region and New Zealand, Southern Dairy Hub chairman Maurice Hardie said.
''Carrying out research in the southern region's climate and soil types will be invaluable. We're excited that research is now under way to drive better farming practices, environmental initiatives and increased efficiency on farm,'' he said in a statement.
Four and a-half years ago, local farmers, with the support of DairyNZ, brought together like-minded people to build a business case, find the money needed and buy suitable land.
Setting up the hub and purchasing stock had so far cost about $19.5million. Principal shareholders DairyNZ and AgResearch each contributed $5million, while farmers and businesses added $1.25million through the Southern Dairy Development Trust.
''Manageable'' debt had funded the balance. A sponsor was being sought for an agribusiness centre at the hub to provide facilities for training, education, farmer events and office spaces, the statement said.
The first research trial is comparing the feed regimes of cows on fodder beet with those on kale. Research to validate DairyNZ's Forage Value Index, a ranking system for ryegrass cultivars, has also started.
A research advisory committee made up of southern farmers and principal partner representatives will decide the research projects.
The committee will assess proposals to ensure objectivity, relevance, and applicability for southern farmers.
Open days and education days will be held at the hub to inform the community about the research being done.
For the 2017-18 season, there are 640 cows split into four different herds, with one used as a control, to enable comparative research trials.
Southland is the third-largest dairy sector in New Zealand, after Waikato and Canterbury, contributing $750 million to regional GDP.
DairyNZ chief executive Dr Tim Mackle said the industry organisation was investing in the hub to help dairy farmers and communities identify the best options for profitable, competitive and sustainable dairying.