FAO thinks we should not be sanguine about falling global food prices:
[T]he gradual return to equilibrium in food markets should not be taken to assume that the world’s food problems have been fixed, neither in the short-run nor with a view to the longer-term challenges. Cereal stocks still need to be replenished and lower prices will again divert more supply from food to fuel. With only 433million tonnes in opening stocks, the cereal stocks-to-use ratio in 2008/09 is at its second lowest in three decades. To bring stocks back to their pre-crisis levels will require 40percent of the production increase in 2008. Bioenergy has already absorbed 100million tonnes of cereals in 2007/08. Falling feedstock prices and new bio-ethanol production capacities arriving, could stimulate new demand and thus moderate an otherwise more drastic decline in prices.
When Eli was young lots of wise folk worried that the stock of grain were too large.