By Bill Tomson
DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)–The spiraling costs of agricultural commodities and dwindling surpluses are taking a toll on the U.S.’s ability to purchase the grains and oilseeds it needs to send aid to the neediest regions in the world.

The amount of aid the U.S. is able to ship overseas fell to about 2.4 million metric tons of bulk, processed and packaged food commodities this year, according to government data. That’s about 400,000 tons less than last year even though the estimated value is roughly $100 million higher.

The government is getting less for the dollar and farmers are getting much more for their crops in a new age of subsidized ethanol and biodiesel production that’s using up more and more corn and soybeans.

When higher commodity prices are mixed with a tight budget, U.S. Department of Agriculture Undersecretary Mark Keenum told Dow Jones Newswires, “we’re going to be able to purchase less commodities for our food aid programs.”

The Bush administration has proposed $1.614 billion for foreign food assistance in 2008, although it may ask for more in supplemental requests.

Congress initially approved $1.596 billion for 2007, but later tacked on
another $450 million.