Shares in H.J. Heinz Company (NYSE: HNZ) are trading at a 52 week-high, on the heels of a better than expected earnings report. The AP reported that: "In the quarter, Heinz earned $194.1 million, or 61 cents per share, compared with $181 million, or 55 cents, a year earlier. Sales rose by 11 percent to $2.69 billion, driven by strong sales in Heinz's top 15 brands. Prices rose 4.5 percent while sales volume went up by 1.2 percent."

The company also raised its dividend by 9%. What's interesting about the report is that we are finally seeing food producers be able to pass on some of their costs to consumers. This obviously will spell continued inflation pressures going forward, but for the food producer it provides some welcome relief. With the soaring costs of food materials, the ones making all the money are those that are producing the materials. Those that take the materials and add value to them are getting crushed. Until now they have had to eat much of the increase in production costs, thus adversely impacting their bottom lines. The fact that Heinz is trading at a 52 week high is a testament to solid management.

This group has the potential to move higher. If we were to get a drop in food material prices -- nothing goes up forever -- stocks like Heinz conceptually could benefit.

For long term investors looking for a contrarian play, you may want to take a look at the food group.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 5/29/08.