The good news is that this year's record output of corn, rice and soybeans means higher earnings for American farmers and lower food prices for consumers. The bad news is that the savings for consumers are not as great as they can and should be - and the culprit is federal farm subsidies.

Scripps Howard News Service reports that shoppers may save an estimated $6 billion next year on items from cereal to meat.That's because animals fed on cheap grain cost less to raise. But to protect farm profits pressured by this bounty, the Department of Agriculture will pay up to $4 billion in price supports to farmers. Thus does Washington's excessive generosity reduce overall consumer savings by two-thirds.

The time has come to eliminate these handouts. One reason is that the next Congress can't reasonably expect to cut welfare payments to the poor while lavishing tax funds on reasonably well-off farmers. In 1990, the average farm-operator household income was $51,500, $14,100 above the national average.

Another reason is that most farmers really don't need Uncle Sam to prop them up. Over the past decade, farm subsidies have fallen to the point where many farmers seem willing to forgo them.

With subsidies topping out at some $9 billion this year, just 37 percent of 9,754 farmers surveyed in 15 states by the University of Illinois favor the current system.

Freed from government planting mandates, farmers could grow more profitable crops. Easing pesticide rules would also help sugar the no-subsidies pill, while redeeming another GOP pledge: to chop regulations.

Moreover, rising exports guarantee that even if crop subsidies dry up, farmers won't. In 1995, food shipments abroad are expected to hit a record $45 billion. GATT will add billions more to that.

The law that governs most farm programs is up for its periodic five-year renewal in 1995, the debut of the new Republican Congress. If the GOP really means to plow up the welfare state, farm supports are a good place to sink a blade.