No Relief in Sight for Rising Food Prices

Food prices are rising as fast as, if not faster than, energy prices. And it doesn’t look like consumers will get relief anytime soon. But if you know where to look, this can be a moneymaking opportunity for you.

The U.S. Department of Agriculture recently announced that corn inventories are expected to be down to their lowest levels since 1996. Part of this is due to the recent flooding in the Midwest.

The worst thing about corn prices rising to record levels is the residual effect it will have on the price of beef, pork, and poultry. With ethanol producers, livestock producers, and food companies all trying to get their hands on as much corn as possible, prices will continue to soar. And if livestock farmers have to pay a higher price for the corn they use as feed, you can bet they will pass the cost along to the consumer.

If you are looking for a way to invest in the agricultural boom without investing directly in commodities, there is an ETF that can help you take advantage of rising food prices. The PowerShares DB Agriculture Fund (DBA), introduced in January ’07, is designed to rise as the price of agricultural products rise.

The fund has rallied recently and is a little overbought on a daily chart, but it’s worth buying on any dip.

[Ed. Note: Don’t get too worked up about increases in food and gas prices. One of the biggest secrets of successful investing is that market fluctuations are good. The more the market moves, the more money you stand to make. ]

Inspired by his high school economics teacher, Rick Pendergraft fell in love with the markets at an early age. He entered his first investing competition at 17, and opened his first brokerage account before he finished college. At the age of 23, on the third options trade he had ever placed, Rick turned $1,800 into $22,000 in less than a week, when the company he bought became the target of a takeover. He admits it was a stroke of luck, but it was a memorable education as to the leverage that options can provide. After a ten year career in banking, Rick decided to pursue trading full-time. To get his foot in the door, he started out in the sales department at Schaeffer's Investment Research. It was not long before his talent was recognized and he was invited to apprentice under Bernie Schaeffer, one of the top options traders in the world. Rick thrived in his new position and twice received the award for "Top Trader."Rick has developed a loyal following of readers who are grateful for his timely warnings and profitable advice. He is widely recognized as a market expert and has been frequently quoted by Reuters, BusinessWeek, Forbes, USA Today, the New York Times, and the Washington Post. Rick's primary focus is on identifying short and intermediate term rising and falling trends in the major market sectors. His analysis is based on technical factors along with indicators of market sentimentRick lives near Delray Beach, FL with his wife and three children.