From what I've read we've been drawing down worldwide grain reserves 6 years running. There isn't much hope for a turn around due to drought and global climate change.

It's one thing to find a super-giant oil field and spend the next 20 years using more oil than one finds. But that doesn't work with food. If enough food isn't grown then soon people start to die.
I've not seen grain prices go up but I buy local organic stone ground oats and hard wheat. It's already at least 2x as expensive and decoupled from ethanol / world reserves and distribution.

Grim harvest for Australian farmers
by Staff Writers
Grenfell, Australia (AFP) Dec 12, 2007

Ask Stephen Lander what is helping Australian farmers survive the worst drought in living memory and he smiles before revealing the secret: "An understanding bank manager."

"You will find that 80 to 90 percent of farmers are all living on borrowed money," he explains at the hot and dusty property he has worked for decades in the baking dry central west of New South Wales.

As the worst drought in a century grips much of the country, the nation's 130,000 farmers are bearing the brunt of the impact as their hopes for an income again die as their crops fail.

"There's a lot of emotion," says the National Farmers Association's Geoff Knight. "These people haven't had an income for two years."

Lander said it has been seven years since farmers in the region -- who have battled frost, locusts and plant disease as well as the drought -- have made a good living from wheat.

"It's been very difficult the last few years, there's no two ways about it," he said. "I've never seen two years like this in a row." ...