Soybeans also will be in short supply this fall, Hurt said. The U.S. Department of Agriculture estimated the domestic soybean supply might be just 22 days on Aug. 31.

The U.S. experienced a 60 percent growth in soybean exports between 2005 and 2010, with China accounting for the growth, Hurt said. China tripled its purchases of U.S. soybeans in that five-year period, from 8 million acres to 23 million acres.

To satisfy the world's hunger for food and fuel, American farmers have their work cut out for them.

"Either of these demand surges would have had significant impacts on crop prices, farm incomes and land values, but because they were both big and came at the same time the impacts were even larger," Hurt said. He sees some of the major farm issues playing out like this:

* Commodity prices: Stocks for corn and soybeans are very slim, so prices could climb even higher if production shortages develop this summer. It likely will take two years to better restore low stocks, keeping prices strong and volatile until at least the 2012 crop year. "Price volatility sometimes seems very positive for producers when prices are going up for the products they sell but it also means that there could be periods where prices drop very, very quickly," Hurt said.

* Crop acreage: In recent years U.S. farmers have shifted acreage to the high-demand crops of corn and soybeans and away from wheat, cotton and other feed grains such as sorghum and oats. As those crop acreages dropped prices rose so that most all crops now have high prices and there is little land in the U.S. left to shift to higher-demand crops.

* Land values: Farmland prices are soaring as crop prices have moved up faster than costs of production, allowing profit margins to increase. In addition, interest rates have been very low. 

"Those two conditions provide powerful reasons to bid up land values," Hurt said. "Expected returns to corn and soybean production are extraordinarily high for 2011.

"However, at this point, prices of corn and soybeans are expected to be lower for both the 2012 and 2013 crops. These lower prices, along with increased costs, are expected to narrow margins. Narrowing margins, along with the potential for higher interest rates, could keep land value increases at much more moderate levels in coming years."