Droughts in southern South America affect grazing systems in many ways. They reduce biomass productivity; decrease livestock feed intake, weight and reproductive performance; increase farmers’ costs; and reduce farm income. It was hypothesized that simple grazing management variables affect the resilience of grazing systems to droughts at the paddock and farm scales. The effects of grazing management on herbage and animal production were assessed at paddock level, and how technological and structural variables relate to the production and economic performances at farm level. Results of a grazing experiment controlling herbage allowance at paddock level showed that resistance of herbage accumulation and animal live weight to drought was significantly higher for paddocks with higher pre‐drought herbage allowance than for those managed to low herbage allowance treatments. A strong positive linear relationship was found between pre‐drought herbage height and resistance of herbage accumulation rate (p < .01). In a longitudinal study of nine farms in Uruguay, resistance of cow pregnancy rate to drought was positively correlated with cow pregnancy rate (r = .72, p = .02) and farm net income (r = .78, p = .02), and negatively correlated with sheep‐to‐cattle ratio (r = −.80, p = .01). These correlations suggest that farms with higher incomes and low proportions of sheep in the herd withstand drought better (in terms of pregnancy rate). Four common regional production strategies were identified that react differently when farmers face drought, and these results can aid farmers in those regions to design more resilient mixed livestock farming systems and can inform policymakers about effective strategies for mitigating drought impacts in the region.