Find Agflation-Friendly Stocks

Here's something to chew on: Stockpiles of key feed grains are dwindling to markedly thin levels and, correspondingly, prices of these grains have leapt to new highs.

This price spike in grains is being driven by the increasingly wealthy economies in China and India, the same factors that helped propel copper to over $3 a pound and oil to around $70 a barrel.

The specific factor causing the squeeze, a tectonic change in food buying patterns, should keep grain prices elevated for the foreseeable future, analysts say. And what's better, there still appears to be time to get into the farm-related stocks as many bigger players still haven't caught on to what's going on.

"I had 70 meetings with institutional investors and not one had seen the U.S.D.A data," says Don Coxe, portfolio strategist at BMO Financial Group in Chicago.

By the time the current growing season is complete, global inventories of grains like corn and wheat will be sufficient to cover only 45 days of consumption, the U.S. Department of Agriculture projects. (Click here for a video on this topic.)

In terms of cushion to cover an unexpectedly weak harvest or other problems, that's about as thin as it gets. If the forecasters prove correct, it will mark the lowest level relative to consumption since the government began keeping records in 1960, almost half a century ago.

As with any cyclical commodity, inventories of grains are apt to fluctuate, but have averaged about 79 days supply since 1960 vs. the current 49 days.