The Australian sheep industry and its associated research and development agencies have developed a proposal for the CRC for Sheep Industry Innovation. “Top-down” and “bottomup” procedures were used to assess the expected economic benefits from this proposal. Formal “with-CRC” and “without-CRC” scenarios were defined for each product and each research theme. Relevant costs were similarly defined. The requested investment by the Commonwealth and the Australian sheep industry in the CRC is assessed relative to a scenario where an alternative, lower cost research program into this industry is implemented. These extra resources have a discounted value of about $34 million over the 25-year period of this evaluation. These resources are sufficient to allow some new research components to be added to the portfolio, some existing components to produce better outcomes, and a more targeted approach to development and extension that speeds up and increases the adoption of the new technologies that are generated by the research program. The benefit from this extra investment and consequent research effort is estimated to be worth about $518 million in present value terms, which is far in excess of the marginal investment. Thus every $1 of these extra resources brought into the Australian sheep industry through funding the proposed CRC is expected to return around $15.30 to the industry in present value terms.