September 12, 2007

USDA mulls releasing conservation land to ease wheat demand

Recent spikes in US wheat prices will likely impact food costs and the US Department of Agriculture is considering releasing some farm land from an idling program to allow for increased production, US Department of Agriculture (USDA) Secretary Mike Johanns said Tuesday (September 11).

The US has seen "an historic rise in the price of wheat" in recent weeks, Johanns said, but also noted that while "USDA is always concerned about inflation in food prices," other factors such as transportation and energy costs contribute more to the cost of a loaf of bread.

If USDA did release land from its Conservation Reserve Program, or CRP, to help boost production next year, that decision would have to be made in the next 60 to 90 days, Johanns said.

When asked if there were any other tools at his disposal to bring more wheat to the market, Johanns stressed that USDA officials "certainly don't manage the market."

If land were to be taken out of the CRP, there is no guarantee that land would be used to produce wheat.

The USDA considered taking land out of the CRP this year in an effort to boost corn production and meet rising demand for corn-based ethanol, but decided not to do so after early forecasts showed there would be very strong planting.