BILLINGS -- Competition from surging grain prices prompted a Bigfork biofuels developer to announce Friday it will boost its contract price for the oilseed crop camelina.

Great Plains The Camelina Company is one of two groups with plans to produce a combined 200 million gallons of biofuels annually from camelina within the next two to three years.

The companies are aiming to capitalize on rising interest for crop-derived fuels such as biodiesel, touted as an alternative to foreign oil. But reaching their lofty goals will require the companies to secure contracts on an estimated 2 million acres of farmland.

That's a tough sell for farmers enjoying record-high wheat prices. Spring wheat was priced at between $17 and $20 a bushel on Friday, said Lola Raska with the Montana Grain Growers Association. She said about 5 million acres of wheat are planted each year in Montana. To compete, Great Plains said Friday it is increasing its camelina contract price to $9 per bushel. Company founder Sam Huttenbauer said the remaining gap with wheat prices would be covered by camelina's low ''input'' costs -- meaning it needs fewer fertilizers and herbicides.

The price is roughly double what the company offered last year, he said.

''We want to give them a reason to break into camelina this year,'' said Huttenbauer. He said Great Plains also will bump up the price for farmers who had already signed $8-per-bushel contracts for 2008.

The other camelina venture with large-scale aspirations in Montana is a partnership between Seattle-based Targeted Growth and Green Earth Fuel of Houston. Representatives of the venture could not be reached immediately for comment.

U.S. Sen. Jon Tester, D-Mont., inserted a measure in the farm bill pending before Congress that would offer crop insurance to camelina growers. He said Friday that high wheat prices won't be enough to stall the demand for camelina.

''I think it's competitive and that's the bottom line,'' said Tester, a farmer from Big Sandy.

Great Plains also said Friday it will invest $20 million this year in an oilseed crushing facility and a biodiesel refinery. The company previously said it would announce a location for those projects last year, but Huttenbauer said he is still trying to finalize a site.