Long-term data for (simulated) daily pasture growth and moving 12-monthly rainfall totals were used to examine the performance of the DDH/100 mm stocking rate index under theoretically ideal management for three locations in the Western Division of NSW. Stocking rate was adjusted either monthly or biannually based on rolling 12-monthly values for either pasture growth or rainfall. Under these ‘ideal’ conditions, monthly values of the index fluctuated widely around the carrying capacity benchmark. In practice, such comparisons would not provide a reliable assessment of the sustainability of the current stocking rate or of the need to adjust stock number to match seasonal conditions. Stocking rates calculated from pasture growth estimates were similar to those derived simply from rainfall and the carrying capacity benchmark, and produced similar levels of pasture utilisation. This ‘benchmark method’ of stocking rate determination thus provides a readily calculated, dynamic benchmark against which actual stocking rate may be compared. Due to lag effects, application of calculated proper stocking rates may lead to excessive pasture utilisation under low rainfall conditions (12-monthly totals less than 120–150 mm for the locations studied or, as a rule of thumb, the 10th percentile). Continuous paddock monitoring and projection of 12-monthly rainfall totals are therefore essential components of sustainable management. Short-term trends in the stocking rate index, driven by rainfall at constant stocking rate, will not provide any generally reliable indication of impending dry spells or feed deficits.