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At Hamilton, Victoria, the effects of grazing pressure and amount of single superphosphate (SSP) applied, on the productivity and soil resource status of grazing systems based on sheep, have been assessed since 1979. Early work showed that marginal and absolute responses in DM production to SSP were greater when assessed by measuring the net growth of grazed pastures compared with mowing, and that largest response occurred in spring. The botanical composition of the pasture has been dramatically influenced by the amount of SSP applied. Ryegrass and subterranean clover now constitute only 2.3% and 11.0% where an average of 1-4 kg P/ha has been applied each year. In addition, the digestibility of herbage from wellfertilised treatments was 4-9 units higher than from low-fertility treatments. The combination of these effects has allowed achievable annual gross margins to increase from $100/ha at low-fertility treatments to about $400/ha with 18 kg P/ha applied annually. Indicators of sustainability show that so far there have been no major environmental consequences of applying SSP in amounts well above that used by district farmers. Keywords: botanical composition, gross margin, pasture quality, phosphorus, sheep, sustainability