Is it still Kansas if it's not No. 1 in wheat?

You can't tell from the mostly occupied storefronts on Main Street, the mansion that serves as a bed-and-breakfast, or the Lyon Den Café, which serves a hearty breakfast to a steady crowd. But the fortunes of Smith Center, a no-stoplight town in northwestern Kansas, rise and fall with agriculture.

And lately, they've been falling.

Crop prices have tanked. Three years of intensifying drought have shriveled the wheat for farmers and the alfalfa for cattlemen. To top it off, a severe hailstorm further damaged crops Memorial Day weekend.

So when news came that North Dakota will likely replace Kansas as this year's top wheat-producing state, many places might have called it, well, the last straw.

But here in western Kansas, humor runs as dry as the land itself, and a stubborn optimism holds sway.

Smith County, where the original words to "Home on the Range" were penned, is far from giving up. As farmers begin harvesting their most drought-stricken wheat crop in years, locals don't voice too many discouraging words, even when getting trumped by North Dakota.

"It hurts our pride," concedes Ernie Schlatter, a local wheat farmer showing off hail-damaged wheat that was within weeks of harvesting. "But it won't last long."

"I don't think too many people would get very flipped about that, because we have had a run of bad luck," adds Connie Lull, a retired registered nurse. "Give us a break, and we'll probably beat them again."

So far, the breaks have not come, especially to the west of Smith Center. "I've never had wheat this short before," says Jerry McReynolds, walking through a field some 50 miles to the southwest (which, in Kansas, means practically next door). Normally, the grain heads would touch his belt and make anywhere from 27 to 50 bushels to the acre. This year, they barely reach his shins and won't make even one bushel to the acre.

"You probably could have gone on a cruise and lost less money," he says, staring ruefully at his ruined crop.

In a land where farmers let fields go fallow a whole year just to capture enough moisture to raise a crop, that kind of wryness remains a local specialty. It also has a long history. It was a Kansan, after all, who drily captured the disappointment of many homesteaders when he hung a sign from his wagon headed back east: "In God We Trusted. In Kansas We Busted."

Apparently, the knack for a prairie-style bon mot comes from surviving on expanses of land where the sky goes on forever (and the nearest Wal-Mart can lie 90 miles away).

"We don't have great soil, and we certainly don't have a lot of rainfall," Mr. McReynolds explains. "You have to have a sense of humor about it.... Otherwise, we'd be jumping off a barn."

North Dakota and Kansas have swapped positions several times over the years as top wheat state, but they remain much different places. North Dakota produces spring and durum wheat, as well as the winter varieties, and, at least until recently, has been battling too much moisture. Kansas specializes in the winter stuff (planted in the fall and harvested the following spring and summer) and is stuck in drought.

This year, the US Agriculture Department forecasts the nation will produce the smallest winter wheat crop in 24 years on the fewest harvested acres since 1917. The decline stems in part because low prices have forced farmers to try other crops – in part because of Kansas's drought.

"Agriculture in Smith County, Kan., is the heartbeat and lifeblood of our local economy," says Terry Barta, senior vice president for one of two locally owned banks in town. "Whatever conditions, favorable or adverse, affect our families out on the farm affect us here in town.... The mood is quite sobering right now."

But there remain some saving graces, he points out. Most producers have taken out federal crop insurance, which means they'll recover much of their costs. Land prices have stayed steady, unlike the last agricultural crisis in the 1980s, when plummeting land values, along with high debts, forced many operators out of business.

The new farm bill, although it delays a market-loss payment that many producers had been counting on, will continue the flow of subsidies that should allow most producers to hang on.

"In this country, there's an old saying," says Mr. Schlatter, standing in a field of amber wheat that, despite all the setbacks, still looks golden and ample. "Tough times don't last forever, but tough people do."

Across the unpaved road lies the land his wife's grandfather homesteaded. Back then, living conditions were so contrary that some settlers drove back home. The man who homesteaded the field where Schlatter is standing quit after three years.

"I guess it was too harsh a life," he says. But "most of us are descendants of the homesteaders.... It's an occupation where you have got to have a positive attitude."

And, maybe, a little rain.