Australian shepherds can be born with distinctive bobbed tails, but puppies can also be born with long tails or partially bobbed tails. Following birth, a breeder docks the tails of the puppies to conform with the accepted appearance of the breed.
The Australian shepherd was developed in the United States, not Australia, to be a working dog primarily used for herding livestock such as sheep and cows. The reason for the docked tail is not clear, though there are several theories for its utility.
One theory is that the short tail may function to prevent or eliminate damage as a result of trampling by livestock. Another is that the short tail gives the Australian shepherd a uniform appearance. A third theory is that the short tail helps keep the dog's posterior clean by eliminating a source of debris accumulation.