Omari Gates
Australia and the United States have had a free trade agreement since 2005, allowing most products to be traded tariff-free. Despite this, there are several differences between the two countries' agricultural sectors. Australia's agricultural exports to the US were valued at US$4 billion in 2022, while imports of agricultural products from the US were valued at US$1.7 billion. Australia's agricultural sector is characterised by extensive pastoral and cropping activities, with a focus on beef, dairy, sheep, grains, and horticulture. The US, on the other hand, exports pork, fresh and processed fruits and vegetables, pet food, whiskey, bourbon, and timber products to Australia. Australia's agricultural emissions are 42% lower than those of the US, and the country has seen a significant increase in foreign ownership of agricultural land in the 2010s. Additionally, Australia's agritech and foodtech sectors present opportunities for US exporters, with the adoption of smart farming technologies and agricultural robots.
| Characteristics | Values |
|---|---|
| Major agricultural products | Australia: Wheat, barley, canola, cotton, sugar, beef, lamb, wool, wine, and dairy United States: Corn, soybeans, meat, and dairy |
| Largest export market | Australia: China, Japan, the United States, South Korea, and Indonesia United States: Not specified |
| Largest export market for wine | Australia: China, the United States, the United Kingdom, and Canada United States: Not specified |
| Largest export market for wool | Australia: China, India, and Italy United States: Not specified |
| Largest export market for lamb and mutton | Australia: China, the United States, and the Middle East United States: Not specified |
| Trade agreement | Australia: Has a free trade agreement with the United States since 2005 United States: Not specified |
| Agricultural subsidies | Australia: Not specified United States: One of the world's largest subsidizers |
| Sector size | Australia: Not specified United States: One of the largest exporters of agricultural commodities |
| Sustainability | Australia: Has strong sustainability credentials, with low chemical and fertiliser use and low on-farm emissions United States: Has higher emissions than Australia |
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What You'll Learn
Australia exports beef, the US exports corn and soybeans
Agriculture is a significant sector in both Australia and the United States, with each country specialising in different commodities for export. Australia exports beef, while the US exports corn and soybeans.
Australia Exports Beef
Australia is one of the world's top beef exporters, alongside the US, Brazil, and Argentina. Australian cattle are predominantly pasture-fed, with just under 40% finished on grain. The country exports beef worth A$4 billion annually to the US, its largest market. However, US tariffs on Australian beef have impacted exports, leading to short-term disruptions and higher prices for American consumers.
The US Exports Corn and Soybeans
The US is a major producer and the largest exporter of agricultural commodities. Corn and soybeans are significant crops in the US, with a large share used as feed for the livestock industry. Historically, the US dominated corn exports, accounting for about 60% of global exports in the mid-2000s. However, its market share has declined due to increased competition from countries like Brazil. Similarly, Chinese tariffs on US soybeans have resulted in a significant loss of exports, with Brazil and Argentina gaining global market share.
The differences in export commodities between Australia and the US have mitigated the effects of trade disputes, such as the China-US trade war. While the US faces challenges in the global market due to tariffs and competition, Australia's beef industry continues to supply the US market, albeit with higher tariffs.
It is worth noting that Australia and the US also compete in China across a broad range of lower-volume and high-value goods. Additionally, Australia's agricultural sector stands out for its sustainability credentials, with lower chemical and fertiliser use and lower emissions per unit of agricultural output compared to the US.
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Australia's cattle are pasture-fed, while the US uses grain
Agriculture is one of the major industries in both Australia and the United States. However, there are differences in the agricultural practices of the two countries. One of the key differences is in the way they feed their cattle—Australia's cattle are predominantly pasture-fed, while the US uses grain.
In Australia, the beef industry is the largest agricultural enterprise, and the country is the second-largest beef exporter in the world. All states and territories of Australia support cattle breeding in a wide range of climates, with the industry covering an area of over 200 million hectares. Australian cattle are mostly pasture-fed and finished, with just under 40% of cattle finished on grain. Pasture-fed or grass-fed beef refers to meat from cattle that have been allowed to graze on natural pastures and consume grass and other forage for their entire lives, rather than being confined to feedlots and fed grains and other supplements. The Cattle Council of Australia has a 'Pasture Fed Cattle Assurance System (PCAS)' that allows producers to use the 'pasture-fed' claim for marketing purposes. This standard requires that the cattle have never been fed separated grain or grain by-products and have always had access to grazing pasture.
On average, Australian cattle spend 105 days in feedlots, where they are fed a predominantly grain-based diet to speed up weight gain and get them ready for market faster. About 60-65% of a cow's diet comes from fresh grazed grass over a year, and farmers often work with nutritionists to ensure their cows receive a balanced and healthy diet. In 2022, grain-fed cattle accounted for 47% of Australia's total cattle slaughter, a new record compared to grass-fed.
In contrast, the US has a large agriculture sector and it is the largest exporter of agricultural commodities. Crop production in the US is dominated by corn and soybeans, a significant portion of which is used as feed for the livestock industry. The US has a small sheep meat and wool industry, contributing less than 1% to total agricultural production.
Australia has strong sustainability credentials in agriculture, with lower chemical and fertiliser use than many other countries. Australia's application of nitrogen fertiliser is 74% lower than in the United States per hectare of arable and permanent cropland. Australian agriculture also has remarkably low on-farm emissions, with a representative basket of agricultural commodities producing 42% less emissions than in the US.
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Australia has lower on-farm emissions and chemical use
Australia's agricultural sector has strong sustainability credentials, with on-farm emissions and chemical use being lower than in many other countries.
On-farm emissions
Australia's farm sector emissions fluctuate annually, depending on seasonal conditions. Between 2005 and 2022, agriculture contributed between 12% and 18% of national greenhouse gas emissions. The country's agricultural commodities produce 42% less in emissions than the United States, 29% less than the EU, and 12% less than New Zealand.
Rice farming, which traditionally involves flooding fields with water, creating ideal conditions for methane-producing bacteria, has seen around 60-70% of Australian farmers adopting a different sowing method. This method delays the flooding of fields and has been found to reduce emissions by over 50%.
There are also potential solutions to reduce methane emissions from livestock, such as supplements derived from red seaweed and the chemical 3-NOP, vaccines, and selective breeding techniques.
Chemical use
Australia's chemical and fertiliser use is at world best practice levels. For example, Australia's application of nitrogen fertiliser is 90% lower than the Netherlands, 81% lower than France, and 74% lower than the United States per hectare of arable and permanent cropland.
The use of chemicals is integral to agricultural production systems, and Australia has strict regulations in place to manage their use. The Australian Pesticides and Veterinary Medicines Authority (APVMA) regulates the use of agricultural chemicals, including pesticides and veterinary medicines.
The Rural Research and Development Corporation Climate Initiative also plays a crucial role in managing climate risk and reducing emissions for the agricultural sector.
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The US is the largest exporter of agricultural commodities
The US is the world's largest exporter of agricultural commodities and the second-largest agricultural trader, behind the European Union. The country exported approximately $175 billion in agricultural products in 2024, with about 63% of exports going to markets in East Asia and North America. The US's agricultural exports and imports have increased significantly over the last 25 years due to the economic ascension of emerging economies and the implementation of foreign and domestic policies that expanded access to foreign markets. The US exports a wide range of agricultural products, including grains and feeds, oilseeds and products, livestock and animal products, and horticultural products. The top three commodity groups exported to East Asia include oilseeds, grains, and meats.
The US's large agriculture sector means that changes in production, trade, and policy can affect international markets. For instance, the China-US trade dispute caused a diversion in exports for Australia and other countries. The US's agricultural exports support output, employment, income, and purchasing power in both the farm and non-farm sectors. Every $1 billion of US agricultural exports in 2022 supported approximately 6,338 US jobs throughout the economy.
In comparison, Australian agriculture has strong sustainability credentials, with chemical and fertiliser use at world best practice levels. Australia's application of nitrogen fertiliser is 74% lower than in the US per hectare of arable and permanent cropland. Australian cattle are predominantly pasture-fed, with just under 40% finished on grain. Milk is the second-largest contributor to the value of livestock production, followed by wool and sheep meat. Wheat accounts for a relatively small share of total agricultural production at 3%. In contrast, crop production in the US is dominated by corn and soybeans, a significant share of which is used as feed for the livestock industry.
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Australia's main market is Asia, the US is China
Australia's agricultural sector has strong sustainability credentials, with chemical and fertiliser use at world best practice levels. For instance, Australia's nitrogen fertiliser application is 74-90% lower than that of the Netherlands, France, and the United States per hectare of arable and permanent cropland. Additionally, Australia's farm sector emissions are significantly lower than those of the United States, the European Union, and New Zealand.
Australia's main market for agricultural products is Asia. Bruce Gosper, CEO of Austrade, highlighted Western Australia's proximity to Asia and its perspective on South Asia and Africa. Australia has traditionally exported primary products such as butter, dairy, wool, and hides to Asia. However, there is now a growing demand for secondary products, including manufactured goods, vocational training, and high-end services. Domestic consumption is rising in Indonesia, the Philippines, Thailand, and South Korea, providing opportunities for Australian exports in food, beverages, and value-chain inputs. Hong Kong, Singapore, and South Korea are also services and knowledge-driven markets, similar to Australia, creating further prospects for Australian high-end services.
The United States, on the other hand, has China as its primary market for agricultural commodities. The US is the largest exporter of agricultural products, and its trade policies can significantly impact international markets. The China-US trade dispute has caused a diversion in exports for Australia and other countries. While the US and Australia compete in China for lower-volume and high-value goods, the China-US trade war has mitigated its effects on Australian agricultural exporters due to differences in their exported agricultural products.
Despite China's economic headwinds, including trade issues with the US, weak domestic demand, and a housing glut, it remains a significant player in the global economy. China is fostering the development of its markets by providing greater access to foreign investors. However, international investors remain cautious due to economic conditions, geopolitical concerns, and trading restrictions.
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Frequently asked questions
Australian agriculture has strong sustainability credentials, with chemical and fertiliser use at world best practice levels. Australia's application of nitrogen fertiliser is 74% lower than in the US per hectare of arable and permanent cropland. Australia also has remarkably low on-farm emissions per unit of agricultural output.
Wheat accounts for a relatively small share of total agricultural production in Australia at 3%. In the US, crop production is dominated by corn and soybeans, which are also used to feed livestock. In Australia, wheat is the largest crop, followed by barley, canola, cotton and sugar. The beef industry is Australia's largest agricultural enterprise, and it is the second-largest exporter of beef in the world. The US exports a wide range of agricultural products, and is the largest exporter of agricultural commodities.
The US is the largest exporter of agricultural commodities, so changes in production, trade and policy can affect international markets. The China-US trade dispute caused a diversion in exports for Australia. Since 2005, Australia and the US have had a free trade agreement, and Australian agricultural exports to the US were US$4 billion in 2022, with imports of US$1.7 billion. China is the largest importer of Australian agricultural products, with the US also a significant market.
Australian agriculture is one of the most efficient and technologically advanced industries in the world. The high productivity of Australian agriculture is due in large part to the development of new technologies and practices, including investment in public sector agricultural research. The first European settlers brought agricultural technology that radically changed practices in Australia.
Australian cattle are predominantly pasture-fed and finished, with just under 40% finished on grain. Milk is the second-largest contributor to the value of livestock production, followed by wool and sheep meat. In the US, the sheep meat and wool industries are small, accounting for less than 1% of total agricultural production.
