The key question is how long the low prices will last and what supply and demand response there is to the low prices. If one is pessimistic about demand because of things like an extended Asian crisis and the Russian crisis, then it does not look as though increasing demand will pull prices up very rapidly. The question then is whether low prices will reduce supply. We see very low short term supply elasticities for the Great Plains for wheat. These areas are going to produce a lot of wheat at any price above variable cost in the short and medium term.
Corn is more price responsive.
But, if corn producers move more to soybeans this only causes problems of increased supply there. Another critical question is whether continued wheat production in the face of extremely low wheat prices acts to depress corn prices as well since wheat can be utilized as a feed grain. The fundamental question is whether market adjustments under Freedom to Farm will be rapid enough to mitigate financial stress and political pressure to change the program when supplies are large and prices are low. If it does not, then much of the burden for improved prices rests on increasing demand and the prospects for this do not appear to be good. However, if we get La Nina bad weather next year and a reduction in basic crops around the world mother nature's supply control will have made Freedom to Farm work.