The growers aren't in business to lose money (not on purpose anyway). If a crop isn't likely to turn a profit, it's kind of hard to justify growing, isn't it? I believe that contract production is the way it will go. Most barley growing areas are outside the corn belt meaning their growing season is too short.
On subsidies, most farmers that I know wish the government would stay to heck out of agriculture period. But they want to control, as best they can, food production. More voters eat food than grow it.
If our government weren't so annal in their petrolium policies, the input costs would go down significantly.