12.6 itunes convert to mp3?

It used to be easy to convert to mp3 but now I am missing something.

I have the import preferences changed to MP3 Encoder.

But there is not an option to "create new version" under the file tab.

The convert option under the file tab is all greyed out... but it does show MP3.

What am I missing here?

Any help would be appreciated.

Thanks!!