Australia is usually a big competitor with the U.S. grain markets. But Australia may start importing more feed grains and DDGs from the U.S. due to the drought that's gripping the country.

Recently Australia's federal government authorized livestock producers to import grains.

"This announcement greatly improves the prospect for U.S. feed grains and co-product exports to Australia," says Mike Callahan, USGC director of international operations.

The he last time Australia imported bulk shipments of feed grains was 2003 when roughly 48,000 metric tons (18.9 million bushels) of corn were imported from the United States, also a result of severe drought conditions. Australian feed grains producers in the eastern region are reportedly expecting a two ton decrease.

Total production of Australia's top three grains is forecast to be only 18 million tons — around 42% below the five year average. However, Callahan says this anticipated forecast is still greater than last year's production.

"Most of their stored supplies have been depleted, causing imports to be a necessity," says Callahan, who was in Australia accessing the market situation in early October. "The approved grain imports include corn and sorghum from the United States, but there is also a good possibility for us to be able to export some DDGs as well."

Source: U.S. Grains Council.