If you’re waiting for a reprieve of rising food prices at the grocery store, you could be waiting awhile. Food prices surged to their highest level ever last month, taking agriculture exchange traded funds (ETFs) higher along with them.

The Food and Agriculture Organization price index rose 2.2%. It was the eight straight jump since June and the highest since record-keeping began in 1990, says Caroline Henshaw for The Wall Street Journal.

The increase has been blamed on the host of factors:

  • Global food supplies are tight because of bad weather in the regions of major exporters coupled with an increase in demand from emerging markets
  • Supplies for crops like wheat are being hit as farmers devote more land to corn because it can be used more widely, such as in ethanol
  • Volatility in oil prices, which hasn’t really yet been a huge driving factor, is anticipated to become  one like it did in 2008

The FAO says that while a food crisis this fiscal year might be dodged, it’s not ruling anything out in 2011-12.

The rising prices have been kind to agriculture ETFs like PowerShares DB Agriculture (NYSEArca: DBA), which is up nearly 32% in the last six months. Despite the recent gains, however, it’s still almost 17% off its all-time high, reached on June 30, 2008. DBA tracks a basket of agriculture futures contracts, including coffee, sugar and cocoa. [5 ETFs to Hedge ‘Agflation.’]

Teucrium Corn (NYSEArca: CORN), which launched in June last year, has gained more than 72% since then. CORN tracks a basket of futures contracts on corn.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.