The benefits of mixed grazing sheep and cattle have been reviewed by Nolan and Connolly (1977). Sheep performance was improved in practically all comparisons and cattle perfomance in the majority of reports. As dairy producers manage their milk quota through various efficiency options, surplus land may become available for alternative use. Based on results from other sheep/dry stock studies the introduction of sheep onto the dairy farm, to utilise surplus/waste grass throughout the year, should lead to increased pasture utilisation and improved overall farm efficiency. The sheep enterprise may be established as a distinct unit and strategically used to exploit feed surpluses on the dairy unit throughtout the year. Alternatively, the full integration of a sheep enterprise with the dairy cows to exploit the benefits of mixed species grazing, may be considered. This latter approach is being evaluated and this report covers the first year of an on-going study.