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Grazing livestock are an important source of food and income for millions of people worldwide. Changes in mean climate and increasing climate variability are affecting grasslands' carrying capacity, thus threatening the livelihood of millions of people as well as the health of grassland ecosystems. Compared with cropping systems, relatively little is known about the impact of such climatic changes on grasslands and livestock productivity and the adaptation responses available to farmers. In this study, we analysed the relationship between changes in mean precipitation, precipitation variability, farming practices and grazing cattle using a system dynamics approach for a semi-arid Australian rangeland system. We found that forage production and animal stocking rates were significantly affected by drought intensities and durations as well as by long-term climate trends. After a drought event, herd size recovery times ranged from years to decades in the absence of proactive restocking through animal purchases. Decreases in the annual precipitation means or increases in the interannual (year-to-year) and intra-annual (month-to-month) precipitation variability, all reduced herd sizes. The contribution of farming practices versus climate effect on herd dynamics varied depending on the herd characteristics considered. Climate contributed the most to the variance in stocking rates, followed by forage productivity levels and feeding supplementation practices (with or without urea and molasses). While intensification strategies and favourable climates increased long-term herd sizes, they also resulted in larger reductions in animal numbers during droughts and raised total enteric methane emissions. In the face of future climate trends, the grazing sector will need to increase its adaptability. Understanding which farming strategies can be beneficial, where, and when, as well as the enabling mechanisms required to implement them, will be critical for effectively improving rangelands and the livelihoods of pastoralists worldwide.