Genetic improvement programs for livestock and pasture plants have been central to the development of the New Zealand (NZ) pastoral industry. Although genetic improvement of livestock is easily shown to improve animal production on-farm, the link between genetic improvement of pasture plants and animal production is less direct. For several reasons, gains in farm output arising from improved plant performance are more difficult to confirm than those arising from livestock improvement, which has led to some debate in the livestock industries about which plant traits to prioritise in future breeding programs to deliver the greatest benefit. This review investigates this situation, with the aim of understanding how genetic improvement of perennial ryegrass (Lolium perenne L.), the predominant pasture grass, may more directly contribute towards increased productivity in the NZ dairy industry. The review focuses on the dairy industry, since it is the largest contributor to the total value of NZ agricultural exports. Also, because rates of pasture renewal are greater in the dairy industry compared with the sheep and beef industries, genetic gain in pasture plants is likely to have the greatest impact if the correct plant traits are targeted. The review highlights that many aspects of ryegrass growth and ecology have been manipulated through breeding, with evidence to show that plant performance has been altered as a result. However, it is not clear to what extent these gains have contributed to the economic development of the NZ dairy industry. There are opportunities for breeders and scientists to work together more closely in defining economic traits that positively influence pasture performance and to translate this information to objectives for breeding programs, systematically linking information on the measured traits of ryegrass cultivars to economic values for those traits to assist farmer decision-making regarding the most appropriate cultivars to use in their farm system, and better defining genotype × environment interactions in key productivity traits of modern ryegrass cultivars. Changes in priorities for investment of public- and industry-good funds in forage improvement research and development will be needed if these opportunities are to be captured.