You probably don't need to stock up on flour yet, but it's not good news that Oklahoma's wheat crop is now expected to be the worst since 1957. Extended drought combined with hailstorms (when it rains, it hurts) and plant diseases have left the crop weak and immature. This picture, from Agriculture Online, is explained by Oklahoma Wheat Commission executive director Mark Hodges:

As you can see there are no secondary roots at all and you can still see the red seed treatment, five months after planting.

We used to have an agriculture system in this country that stored food in times of plenty and released it in times of paucity, but the previous spy-on-Americans GOP administration managed to destroy it in the name of short-tem political gain, and because they could. Michael Pollan explained in this 2003 New York Times article on obesity that is now behind the firewall:

The rules of classical economics just don't seem to operate very well on the farm. When prices fall, for example, it would make sense for farmers to cut back on production, shrinking the supply of food to drive up its price. But in reality, farmers do precisely the opposite, planting and harvesting more food to keep their total income from falling, a practice that of course depresses prices even further. What's rational for the individual farmer is disastrous for farmers as a group. Add to this logic the constant stream of improvements in agricultural technology (mechanization, hybrid seed, agrochemicals and now genetically modified crops -- innovations all eagerly seized on by farmers hoping to stay one step ahead of falling prices by boosting yield), and you have a sure-fire recipe for overproduction -- another word for way too much food.

[…F]arm programs in America were originally created as a way to shrink the great mountain of grain, and for many years they helped to do just that. The Roosevelt administration established the nation's first program of farm support during the Depression, though not, as many people seem to think, to feed a hungry nation. Then, as now, the problem was too much food, not too little; New Deal farm policy was designed to help farmers reeling from a farm depression caused by what usually causes a farm depression: collapsing prices due to overproduction. [...]

New Deal farm policy, quite unlike our own, set out to solve the problem of overproduction. It established a system of price supports, backed by a grain reserve, that worked to keep surplus grain off the market, thereby breaking the vicious cycle in which farmers have to produce more every year to stay even.

It is worth recalling how this system worked, since it suggests one possible path out of the current subsidy morass. Basically, the federal government set and supported a target price (based on the actual cost of production) for storable commodities like corn. When the market price dropped below the target, a farmer was given an option: rather than sell his harvest at the low price, he could take out what was called a "nonrecourse loan," using his corn as collateral, for the full value of his crop. The farmer then stored his corn until the market improved, at which point he sold it and used the proceeds to repay the loan. If the market failed to improve that year, the farmer could discharge his debt simply by handing his corn over to the government, which would add it to something called, rather quaintly, the "ever-normal granary." This was a grain reserve managed by the U.S.D.A., which would sell from it whenever prices spiked (during a bad harvest, say), thereby smoothing out the vicissitudes of the market and keeping the cost of food more or less steady - or "ever normal."

This wasn't a perfect system by any means, but it did keep cheap grain from flooding the market and by doing so supported the prices farmers received. And it did this at a remarkably small cost to the government, since most of the loans were repaid. Even when they weren't, and the government was left holding the bag (i.e., all those bushels of collateral grain), the U.S.D.A. was eventually able to unload it, and often did so at a profit. The program actually made money in good years. Compare that with the current subsidy regime, which costs American taxpayers about $19 billion a year and does virtually nothing to control production.

So why did we ever abandon this comparatively sane sort of farm policy? Politics, in a word. The shift from an agricultural-support system designed to discourage overproduction to one that encourages it dates to the early 1970's - to the last time food prices in America climbed high enough to generate significant political heat. That happened after news of Nixon's 1972 grain deal with the Soviet Union broke, a disclosure that coincided with a spell of bad weather in the farm belt. Commodity prices soared, and before long so did supermarket prices for meat, milk, bread and other staple foods tied to the cost of grain. Angry consumers took to the streets to protest food prices and staged a nationwide meat boycott to protest the high cost of hamburger, that American birthright. Recognizing the political peril, Nixon ordered his secretary of agriculture, Earl Butz, to do whatever was necessary to drive down the price of food.

Butz implored America's farmers to plant their fields "fence row to fence row" and set about dismantling 40 years of farm policy designed to prevent overproduction. He shuttered the ever-normal granary, dropped the target price for grain and inaugurated a new subsidy system, which eventually replaced nonrecourse loans with direct payments to farmers. The distinction may sound technical, but in effect it was revolutionary. For instead of lending farmers money so they could keep their grain off the market, the government offered to simply cut them a check, freeing them to dump their harvests on the market no matter what the price.

The new system achieved exactly what it was intended to: the price of food hasn't been a political problem for the government since the Nixon era. Commodity prices have steadily declined, and in the perverse logic of agricultural economics, production has increased, as farmers struggle to stay solvent. As you can imagine, the shift from supporting agricultural prices to subsidizing much lower prices has been a boon to agribusiness companies because it slashes the cost of their raw materials. [...]

You would have thought that lower commodity prices would represent a boon to consumers, but it doesn't work out that way, not unless you believe a 32-ounce Big Gulp is a great deal. When the raw materials for food become so abundant and cheap, the clever strategy for a food company is not necessarily to lower prices - to do that would only lower its revenues. It makes much more sense to compete for the consumer's dollar by increasing portion sizes - and as Greg Critser points out in his recent book "Fat Land," the bigger the portion, the more food people will eat. […]

Such cheap raw materials also argue for devising more and more highly processed food, because the real money will never be in selling cheap corn (or soybeans or rice) but in "adding value" to that commodity. Which is one reason that in the years since the nation moved to a cheap-food farm policy, the number and variety of new snack foods in the supermarket have ballooned.

The abundance of corn, in particular, has led to thousands of products that use HFCS - high-fructose corn syrup - to make them more moist, more sweet, and more caloric. Now, thanks to all this, not only are we a nation of fat (present company included), but thanks to rock-bottom grain prices, farmers that have to produce all they can to eke by aren't even going to get halfway there:

Oklahoma's five-year wheat production average is 140 million bushels. On Friday, the USDA estimated the 2006 crop at 68.2 million bushels.

The price of pasta may not peak, but the farmers are in trouble again.