The Southern Dairy Hub project is delaying the start of milk supply until 2017-18 as a suitable farm has not yet been secured.
Finding a farm of suitable size and scale was proving to be more of a challenge than anticipated, chairman Maurice Hardie said.
The project will include a 300 380ha dairy farm with four comparative herds of approximately 200 cows each, and buildings for research, demonstration, education and meetings.
Ideally, the farm should be in central Southland and within 30 minutes of Invercargill Airport so it was accessible to as many people as possible.