A few months ago, the "smart money" was pouring into all things agricultural. Corn was flirting with $8/bushel (up from less than $2 as recently as 2005), hedge funds were snapping up farmland everywhere from the Midwest to Africa, and that weird guy who babbles and blusters about stocks on cable TV — Jim Cramer — was bellowing the praises of fertilizer companies.

People like me lamented the consequences: gushers of agrichemicals onto farmland and into air and water, expansions of monocrop agriculture into environmentally sensitive areas, all without any real increase in food security or food access for the globe’s billion poor people.

All of that indeed came to pass — but the bloom seems to have faded on the industrial-ag renaissance. The ever-intensifying credit crisis has stoked fears of a global recession and sent investors fleeing all but the safest investments.

Signs are everywhere. "How low can U.S. grains go?" asks the headline of a recent Reuters story. The news agency reports that corn is now "hovering above $4 a bushel, down 14 percent since Sept. 30 and about 45 percent lower than the record high of $7.65 set in June."

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The price could come down even further. Reuters reports that commodity index mutual funds — investment vehicles that buy stuff like corn on speculation — still have heavy positions in corn. Meanwhile, it’s springtime in the southern hemisphere, where farmers in Brazil and Argentina are now planting. A bumper crop down there could send corn prices tumbling.

Then there are the shares in the big fertilizer companies like Mosaic (two-thirds owned by Cargill, the globe’s largest agribiz firm) and Potash Corp. of Saskatchewan. These companies rode the ag wave to the stratosphere, propelled along by the government-fueled ethanol boom. From June 1 2006 to the last week of June 2008, these companies saw their share prices rise by 900 percent and 700 percent, respectively. The performance propelled Jim Cramer from his normal sputtering incoherence into full-on screaming ecstasy.

Now? Since June 17, Potash shares have surrendered nearly 60 percent of their value, while Mosaic’s have plunged close to 80 percent. As for Cramer, he recently groused: "No, once the momentum breaks there is nothing there. All of the fertilizer stocks are a sell here.” Translation: he expects their share prices to keep dropping.

Even long-time, stock-market darling Monsanto, which dominates the global seed and herbicide markets, has seen its shares plunge 40 percent over the past six months.

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As for ethanol makers, not even rising government biofuel mandates and lower corn prices can ease their plight. Check out this Reuters piece from Wednesday:

Ethanol companies may have lost most of their value over the last two years, but that doesn’t necessarily make them cheap for possible suitors, who may be looking for share prices to fall even further.

Take the case of Verasun Energy, an ethanol maker that went public two years ago at $23 per share. Today, it was fetching about $1.70. According to Reuters, at that valuation, the company is trading at "below the replacement value of the company’s ethanol distilleries and tanks."

Investors have evidently bought the message that corn-based ethanol is a joke, and some kind of cellulosic revival isn’t going to save these companies any time soon.

When I started writing this Thursday afternoon, the Dow was down 300 points. A couple of hours later, it’s down 650. Given the state of chaos in financial markets, I think I’d better leave this one here rather than try to come to a sweeping conclusion.

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