<b>By ANN HINCH<br>
Assistant Editor</b> </p><p>

CHICAGO, Ill. — While winter wheat finishes out its growing season, American farmers, agricultural analysts and perhaps even legislators will be trying to decide how to best deal with potential continued grain shortages and high prices in 2008.</p><p>
Primarily, the pressure is on for acreage. “I think this is going to force the (Bush) administration to take another look at the CRP (Conservation Reserve Program) situation,” Richard Feltes, senior vice president and director of commodity investment for MF Global in Chicago, speculated.</p><p>
Last year, farming groups tried to coax the USDA into releasing some CRP acreage under contract – ag acres set aside for wildlife habitat, for which landowners are paid a lease price – to no avail.
Purdue University ag economist Chris Hurt speculates the USDA may become more willing to at least talk about releasing land for future years, since he believes it unlikely the agency would do so for 2008.</p><p>
He added there are probably three million acres more that can be eked out across the country for corn, soybeans and spring wheat – in marginal soils and former Southern farmland, as well as up to a 1.5 million-acre reduction in cotton planting – but that another five million acres is needed on top of that.</p><p>
As for demand itself, Feltes pointed to the recently-passed Congressional energy bill that requires an increase in biofuel production over the next several years. “The USDA will have to decide if it’s the U.S. Department of Ethanol, or the U.S. Department of Agriculture,” he said.</p><p>
That’s not even counting biofuel demand overseas, Hurt said, ticking off other regions dedicated to turning growing things into fuel: Europe, South America, Canada, Malaysia and Indonesia.
He said some economists are suggesting a temporary ethanol corn usage cutback of 10-12 percent in the United States.</p><p>
Congress, which he said does not now impose export tariffs on American grains, may consider such taxes, as well as raising them for sale at world prices. Currently, nations with stronger currency (such as China and India) can take advantage of the weakened dollar to buy U.S. grain and oilseeds relatively cheaply.</p><p>
China, especially, he said, has a 17 percent inflation rate on food right now. With the USDA’s crop reports on Friday (see related article), coupled with worldwide wheat and soybean shortages, China and other countries may decide to buy even faster for fear of losing out later.</p><p>
“If you want to see fear or great concern, just tell people a blizzard is coming,” Hurt analogized, “and watch the bread and milk … bought up off the shelves.”</p><p>
An extreme measure would be for federal legislators to follow their 1973 counterparts and vote a temporary embargo on crop exports.
Hurt said that was the last time that so many forces were pulling on U.S. agriculture that supply couldn’t meet demand, thanks to Soviet purchases of wheat and rapid inflation here at home.</p><p>
To a lesser extent, he said Congress could vote to cut back on direct food aid to developing foreign nations, but indicated this is not a pleasant alternative from either a humanitarian or public relations standpoint.</p><p>