Farmers wondering where their operating capital will come from in the current bearish markets may find hope in a new "grain bank."

The National Farmers Organi-zation (NFO) is asking farmers to voluntarily hold 20% of their 1998 corn, wheat or soybean crop until suggested target prices are reached.

Randy Pederson, NFO grain department director, says the program is a self-help inventory management program for farmers; the organization provides the leadership. The program should isolate some grain stocks from the current market and create a positive psychological climate, Pederson says. A more positive climate should lead to better prices and thus more cash in hand for operating.In the program, farmers are asked to hold 20% of their crops until specific target price levels are achieved on the Chicago Board of Trade during 1999. The suggested target prices are $3.07/bu. for corn, $7.67/bu. for soybeans and $4.47/bu. for wheat. It's suggested that farmers then use incremental forward contract sales to avoid dumping grain on the market.

NFO will keep a database of farmers in the program and the grain being set aside. An NFO membership is not required to participate. Pederson reports that, since the organization first announced the program two months ago, it has received many calls from both NFO members and nonmembers.In the past, USDA implemented programs to manage excess grain supplies. But now, with the Freedom to Farm program, the burden to manage supplies falls on the farmer. The NFO believes that farm groups working together will successfully manage the supplies.

Contact the National Farmers Organization, Dept. FIN, 2505 Elwood Dr., Ames, IA 50010-2000, 800/247-8113.