You knew it was bound to happen. For two years, farmers have watched with amazement while corn and then soybean and wheat futures rose into uncharted territory as short crops and ethanol demand fueled wild speculation in the commodity markets.

All the while, veteran growers knew those prices could go down just as fast or maybe even faster than they went up. Thus, the declines in corn, soybean and wheat futures of recent weeks weren't as big a surprise to anyone who's been farming more than a few years.

Since June, corn, soybeans and wheat contracts have lost nearly half their value. December 2008 corn futures, which traded at $8 in June, closed at $3.84 on Oct. 16. November 2008 soybeans have fallen from $16 in June to $8.67 while December 2008 soft red winter wheat dropped from $10 to $5.55 per bushel.

In other years, farmers would have been delighted with those closing prices. That was before they were paying more than $4 per gallon for diesel, $1,000 for nitrogen, phosphorus and potassium and $200 per bag for seed. When you subtract the basis — difference between cash and futures — those prices are below break-even for many producers.

This steep decline in prices in only three months is what the leaders of the major farm organizations were talking about when they fought so hard to maintain farm programs at or slightly above the levels of the previous farm bill when Congress passed the 2008 legislation.

They knew the claims by environmentalist group activists and other farm policy “experts” that the older farm programs were no longer needed because of high commodity prices were just camouflage for a misguided attempt to destroy modern-day, commercial farming.

Unfortunately, you have to include the Bush administration and some congressmen who should have known better in that group. A few days ago, USDA officials were still citing record high net farm income projections as a reason for not using parameters that could lead to higher revenue counter-cyclical payments under the new farm bill.

In a press briefing following his speech at the World Food Prize symposium, Agriculture Secretary Ed Schafer said he had made a decision on which years to use for the calculations for the new law's Average Crop Revenue Election option, but wasn't ready to announce it.

“If we were to use what members of Congress want, we would be paying out billions of dollars already because the input costs are higher than the target prices,” he said. “I think we have to walk a fine line of providing a good, optional safety net program for producers, but we also have a responsibility to the people who were promised a $250 million savings from this program.”

Even if USDA does spend more on ACRE, those people Schafer was citing can take heart. With corn, soybean and wheat futures falling 50 percent, prices at the grocery store will be right behind them (smile).