The U.S. Grains Council is projecting increased export potential for U.S. feed grains to Australia as a result of Australia’s federal government authorizing livestock producers to import grains due to ongoing drought conditions.

“This announcement greatly improves the prospect for U.S. feed grains and co-product exports to Australia,” said Mike Callahan, USGC director of international operations. “The Council identified Australia as a priority market for U.S. feed grains several years ago and began developing strong trade and industry contacts down there.” He added that developing trade relationships is essential to developing markets and enabling trade.

Callahan said the 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 decrease in production. This is consistent with the Australian Bureau of Agricultural and Resource Economics (ABARE) recently revising its forecast for the 2007-08 winter feed grains harvest down significantly from previous estimations.

For example, ABARE expects barley production to amount to 5 million tons, previously forecast at 5.9 million tons. Total production of Australia’s top three grains is forecast to be only 18 million tons — around 42 percent below the five year average. However, Callahan said this anticipated forecast is still greater than last year’s production.

“The drought situation in Australia is not a 2007 issue, it has been ongoing over the last few years. Consequently, most of their stored supplies have been depleted, causing imports to be a necessity,” said 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 distiller’s dried grains with solubles (DDGS) as well.”

Callahan said the Council conducted specific promotional initiatives for DDGS, a co-product of ethanol production, over the last 12 months, including sponsoring the attendance of Australian importers to the Council’s International Distillers Grains Conference held last month in Schaumburg, Ill.