There are few holistic analyses of agricultural systems that inclusively consider how the combination of gradual climate change and increased frequencies of extreme climatic events influence biophysical variables as well as economic returns. Here we examine how climate change to 2040 influences pasture growth rates, grazed pasture harvested (PH) and profitability of three case study (baseline) farms in southern Australia. We applied ‘development options’ (or adaptations) to baseline farms in each region that either intensified, simplified or modified the seasonal distribution of feed supply (Intensify, Simplify or Adapt, respectively) by manipulating several components of the farm system simultaneously, including herd size, liveweight and farm assets.

In general, climate change reduced annual pasture produced. On dryland farms, hotter, drier conditions reduced growing durations through later autumn breaks and earlier finishes to spring growth, although winter growth rates were enhanced. On irrigated farms, the magnitude and inter-annual variability of PH was less influenced by climate change. Overall, climate change reduced milk production and income, and increased costs due to additional fodder conservation and more purchased feed.

Current climate variability caused far greater inter-annual variation in PH and profit compared with the long-term impacts of climate change. This suggests that farm outcomes may be improved by tactically managing for short-term climatic variability, rather than by making long-term strategic changes in preparation for climate change.

Future work on adapting dairy businesses to climate change should examine development options that help maintain or extend growing season length and/or harness the additional winter growth. Our study indicates that climate change impacts on dairy systems will be regionally-specific; no individual development option was universally effective in reducing pasture losses to climate change across regions and development options, and no option consistently increased or decreased PH across sites. Future adaptation strategies should thus take into account not only local climate variability as well as climate change, but also the existing farming systems already operating at each site.