The fundamental economic problem is that demand is very inelastic. When you draw a supply-demand curve for food it looks very close to a vertical line, people do not buy significantly more food when you make it cheaper, people do not buy significantly less food until they run out of money.
The implication is that even slight excesses result in rock bottom prices, and even slight shortages result in very high prices. This volatility is bad for everyone. Therefore the government steps in with subsidies to even out how much farmers get, and to guarantee a surplus to avoid ruinous food prices for consumers.
But there is simply no good way to do this without perverse consequences somewhere...
But huge amounts of the staples the US produces are then fed to animals to make meat. It takes something like ten pounds of grain to make a pound of hamburger. If food gets more expensive people cut back on meat, which frees up more grain.
However there is a long lead time for changing how many animals there are in the food pipeline. Thus the amount of meat animals does not increase very rapidly to respond to a bumper crop in wheat. (The meat supply can, however, drop rapidly after a drought or flood...)
And the yearly fluctuations in crop yields tend to be fairly large. Certainly larger than the variation we're likely to see in how much people want to eat.
Are you implying that you buy your food from the farmers or are you're telling me that the food industry/retailers can't estimate the consumer demand and make contracts/futures on that ? And how exactly do futures not change the price swings from year to year ?
The latter. Futures do not change the supply or demand, and therefore do not change the overall results of a supply-demand curve. What they do is allow people to estimate where it will eventually land, and choose whether to lock in prices some distance in advance.
This ignores a subtlety. If one consumer locks in a large fraction of the supply at a low price, then the supply is smaller than expected, you've made the supply-demand problem more extreme for everyone else. So futures allow entities to lessen their own volatility, but that increases everyone else's volatility.