With the price of grains and oilseeds continuing to move higher, there are more and more people beating the drum asking that USDA loosen the restraints on acres that have been put into the Conservation Reserve Program (CRP) allowing for the early release of some of those acres without heavy fines. News of late is even showing that some are calling for some kind of restrictions on exports. This looks very unlikely to happen, but it shows the grand scope of concern that is building.
One of the biggest voices of concern comes from the baking industry. There are plans calling for a march on Washington in the coming month to lobby for the reduction of wheat exports along with asking that CRP acres be released early to offset the high price of grains. Wheat prices have risen so fast that many bakers are having trouble offsetting higher prices they are paying for their inputs.
Wheat prices have exploded over the past month, and as of this writing, Minneapolis March wheat is locked limit at $18.53 per bushel. A year ago Minneapolis wheat traded in the $4.90 area. In the short run, bakers and mills may have to just put up with higher prices over the next few months, until the US Hard Red Winter and Spring Wheat crops are harvested. Wheat production is expected to increase world wide, and will take time before stocks that are at the lowest levels in 30 years lows can begin to be rebuilt.
USDA has commented in the past that they will address the issue of early release of CRP acres over the coming year. Allendale has put together a graph showing the acres that will be coming out of CRP for 2007 on out to 2013. Realize that 25% to 50% of these acres that come out of CRP in any given year will go back into CRP. Environmental groups are against any early release of these acres and also have strong lobbyist's in Washington D.C.
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