Perennial forages have been proposed as a means of ameliorating both the summer–autumn feed gap and the risks posed by soil salinity and erosion in mixed farming areas of southern Australia. Whole-farm simulation analyses using the APSIM and GRAZPLAN models at nine locations across southern Australia have evaluated the likely trade-offs among expected profitability, financial risk, soil erosion risk, deep drainage and soil carbon change as annual pastures are converted to perennial pastures based on a C3 grass, a C4 grass or lucerne. Differences between perennial and annual feedbases in total pasture growth (median –11%, range –47% to +20%) and metabolisable energy supply from pasture (median +1%, range –48% to +52%) were diverse across locations and perennial species. At some locations, improvements in the pasture feedbase were counter-balanced by lower livestock intakes from crop stubbles. The modelled farming system with the highest profit included some perennial pasture at seven of the nine locations, but no one pasture species or land-use system predominated across all locations or producer risk attitudes. Local characteristics of the soils and farming systems are as important as broad climatic factors in determining how substituting perennial for annual pastures alters the trade-off between profitability and wind erosion risk. Further expanding permanent pastures into land currently used for crops only unequivocally reduced wind erosion risk at the four locations with Mediterranean climates. Lucerne grown in long rotations provided the best trade-off between mean gross margin and financial risk at Merriwagga and Temora. Permanent C3 or C4 perennial grass pastures separated from continuous cropping may simultaneously increase profits and reduce business and erosion risk at low-rainfall locations with Mediterranean climates, as long as they can be managed to persist. Managing pastures for greater nitrogen inputs could be considered as an erosion-abatement strategy.