The Lau and Yotopoulos restricted profit function methodology for testing for differences in economic efficiency and its components of allocative and technical efficiency is applied to data from grazing properties in the High Rainfall Zone of New South Wales. Tests are made on the basis of property size and operator's age. Larger farms are found to be significantly more economically efficient than smaller farms. The range of data considered in this study is found to exhibit constant returns to scale. Operator's age is found to have no effect on economic, allocative or technical efficiency and both younger and older operators are found to allocate variable inputs optimally. Finally, the usefulness of the methodology for examining issues related to economic efficiency in the Australian agricultural sector is assesed.