Mr. Schober said China increasingly will rely on imports to satisfy the expanding dietary needs of its consumers. Although China accounts for 20 percent of the world's population, it only has 7 percent of the farmable land on the globe, he said.

Analysts are interpreting BHP Billiton's hostile takeover bid for Potash Corp. of Saskatchewan as a sign the giant Australian mining concern is confident of significant increases in global food demand in the years ahead. Potash is a fertilizer used to boost crop yields.

Based on the fact that BHP offered $130 per share and Potash shares are trading for more than $145, other investors are investing based on food demand projections, said Jeff Mindlin of the Mindlin Fund, a Pittsburgh investment fund whose investments include commodities and commodity-related stocks.

"We're going to start to compete with countries who want to eat the same way we do," he said.

When it comes to determining corn prices, one of the biggest influences has nothing to do with how much humans -- or the animals human eat -- consume. Corn also is used to make ethanol, which can be blended with gasoline to reduce the economy's reliance on imported oil.

Mr. Volkman said that when gasoline prices began recovering in mid-2009, it became more profitable for gasoline companies to buy more ethanol. He expects continued high prices and U.S. Environmental Protection Agency regulations mandating increased use of ethanol will spur increased demand for non-food uses for corn.

Every ear that goes into a gas tank is one less ear that can fatten cattle or other livestock. Higher feed prices have prompted many ranchers to take their cattle to market sooner rather than keep them on a high-priced diet, Mr. Mindlin said.

"The cows they're bringing in to slaughter weigh less. You get less meat," he said.

Mr. Basse said high feed prices have reduced the size of the U.S. beef cow herd to its lowest level since 1952, which he thinks will put upward pressure on beef prices for the next two or three years.

"It's not like we can all of a sudden start making more cattle and calves," he said.

Mr. Basse believes rising global food prices pose the threat of stagflation for U.S. consumers, an economic plight where their income stagnates as prices for food and energy increase.

Some economists prefer excluding food and energy prices when measuring inflation, reasoning that their volatility prevents an accurate reading. That's like playing 18 holes of golf and basing your score on only 15 holes, Mr. Mindlin said. He's suspicious of government statistics that show food prices are stable.

"People can say whatever they want. Commodity prices don't lie," he said.

To be sure, commodity prices are only one component of the price tags found at your local supermarket. Packaging, transportation, marketing, employment and other costs are also reflected in what consumers pay.

But commodities are a good barometer of the global economy, said BNY Mellon chief economist Richard B. Hoey. There's no lag in reporting prices for wheat, sugar and other commodities like there is for other economic statistics, which are only issued weekly, monthly or quarterly, he said.

Mr. Hoey said that while growing demand for food from China and other emerging economies is a long-term trend, a lot of things can happen to change the outlook for how overseas demand will influence prices U.S. consumers pay.

He cited the dire predictions of a few years ago that growing emerging-market demand would drive up natural gas prices. Oftentimes, the predictions don't take into account factors that could cause demand to fall or supply to rise, which is what happened in the case of natural gas.

"Guess what? They discovered a lot of sources for shale and the price of natural gas went down," he said. "You've got to look at the total of supply and demand, and natural gas is a classic illustration of that."

http://www.post-gazette.com/pg/10241/1083245-28.stm