The continuing decline in the terms of trade of the Australian rural industries is maintaining pressure on agricultural industry to assess and modify the manner in which resources are applied to the production of food and fibre. Management practices in industries based on ruminant livestock are changing, particularly with an increase in the economic importance of grain based feedlots and the use of nutritional supplements for livestock on pasture in the meat, wool and dairy industries. These changes result from a need to use particular feed supplements as a means of manipulating and optimising production systems with respect to some limiting resource or factor. Such factors include periodic reductions in pasture quality or a window of opportunity for feeding to meet the production requirements of a particular market. There is also greater acceptance by the livestock industries of the use of novel feed materials, generally the byproducts of the cropping and horticultural industries, as nutritional supplements for cattle and sheep on pasture. Modification of a novel feed material to change its physical and/or nutritional form is often required before it can be optimally incorporated into a livestock production system. Processing increases the cost of the material. There are therefore financial benefits to the livestock producer in using feed supplements that require little processing. Cottonseed is a significant feed resource for ruminant livestock production in eastern Australia. The irrigation districts of Queensland and New South Wales, currently growing all of Australia's cotton crop, produce on average of 583 kT of cottonseeds each year (1990 to 1996) as a byproduct of cotton lint production (ABARE 1996).