"Some believe that our current surplus of wheat, corn and soybeans will persist for some years, that farmers worldwide will continue high production even when faced with low prices but I suspect otherwise."

I was always taught that Ag. production was not  like industry that could change production relative to prices, over the short term and that was the reason that since the '30's we have had some kind of supply management and/ or income support for farmers, because low prices in grains do not cure low crop prices in a resonable time frame, the following from the Ag. Economist Daryll Ray, looks at this very question, what am I missing?.




"It doesn’t work that way in crop agriculture. The land used to produce major crops will continue to be used to produce major crops over a wide range of prices. Total crop acreage/output does not decline significantly with lower prices nor does its demand respond appreciably to lower prices. As a result, inventories can continue to increase and prices can continue to decline"