Tedera (Bituminaria bituminosa C.H. Stirt var. albomarginata) is a drought tolerant perennial legume originating in the Canary Islands. This study evaluates the potential role and value of tedera in dryland mixed crop and sheep production systems in southern Australia. Regional variants of the bio-economic model MIDAS are used to assess tedera in farming systems at two locations. The analysis considers the quantity and quality of feed produced by tedera, the ability of other forages to complement or substitute for tedera and its impact on meat versus wool-producing sheep flocks. The results indicate that tedera offers the potential to increase farm profits by up to 26% and be grown on 28% of a low rainfall mixed enterprise farm. On a high rainfall mixed enterprise farm tedera may boost profit by up to 58% and be grown on 75% of the farm. The modelled increases in farm profit were large and relate to savings in supplementary feed and higher stocking rates. The results of our analysis suggest additional experimental and breeding work is required but the current state of knowledge is consistent with tedera becoming an important forage in southern Australian farming systems.