Farmers are paying more for supplies to grow their crops and they're passing those rising costs onto consumers. The Wall Street Journal reports that farmers paid 65% more for fertilizer in April 2008. Fuel, the second-fastest rising cost, is up 43%. And seed prices have risen 30%. But you can hedge your rising food costs by investing in companies that profit from rising fertilizer prices.

Farmers say too much market power is concentrated in the hands of a small group of companies in the U.S., Canada and Russia that dominate global production of potash and phosphate. Phosphate is up 174% from $365 last year to $1,000 a ton. The price of a ton of potash is up 204% from $230 to $700. Thanks to a rise in natural gas prices, the price of Urea, a nitrogen fertilizer, has doubled to $600 a ton.

Should you hedge your rising food prices by buying stock in Potash and seed suppliers? Potash Corp. (NYSE: POT) and Mosaic Corp. (NYSE: MOS) have benefited from the rising price of Potash. And Monsanto Co. (NYSE: MON) is the biggest seed company out there. They have benefited in the past year -- with stock prices up 202%, 279%, and 103% respectively. But will they keep rising?

• Potash. At a Price/Earnings to Growth ratio (PEG) of 0.8 on a P/E of 45.4 and earnings forecast to grow 60% through 2009, this stock looks pretty cheap and could be a buy.
• Mosaic. At a PEG of 0.2 on a P/E of 37.5 and earnings forecast to grow 191% through 2009, this stock looks cheap. It could be a screaming buy.
• Monsanto. At a PEG of 2.0 on a P/E of 40.8 and earnings forecast to grow 20% through 2009, this stock is not cheap. I'd call it a hold.

If you want to profit from peaking potash and phosphate prices to hedge your rising cost of food, consider investing in Mosaic and Potash.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.