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Investors need to look at food stocks. What was once a "slow and steady" market is changing into a faced-pace area for substantial growth - or loss. As first quarter financials come out, investors should look to these stocks for potential.

Last year's drought drove up prices of grains such as corn, wheat and soybeans. Soybean prices jumped 40% earlier in 2012 while wheat prices soared about 50%. Prices declined in the fall as crops were harvested, but remained elevated. Wheat farmers across the globe suffered from an unusually dry and long summer that hadn't been matched since the early 1960s. The overall wheat crop in the leading wheat providing areas dropped 33% to the lowest since 2003.

Not only that, but the United Nations' Food and Agriculture Organization has estimated global wheat supplies will fall in the 2012-2013 season to just 661 million tons. Wheat food prices overall will increase 3.5% to 4% in 2013. Already global wheat prices have climbed to their highest level in four years and could rise more.

So who should investors look to?

Archer Daniels Midland Co. (ADM) has a market cap of 21.72B and has a 2.4% dividend yield. The Mosaic Co. (MOS), has climbed nearly 8% so far this year. Wall Street has a one-year price target of $84.46, a whopping 38% higher from Monday's closing price.

In addition to these, there is the solid General Mills (GIS). This is a company that has increased its dividend by 65% over the last five years, has a forward yield of 3.20%, and has institutional ownership of 70%. The company also has a market capitalization of $29.90 billion. While generating revenue of $16.657 billion and a net income of $1.5 billion, it boasts an operating margin of 15.38% and a net profit margin 9.01%.

The meat market saw a brief increase in 2012, which could mean a responsive dip in meat supplies and higher prices in 2013. The Livestock Information Center forecasts only 23.6 billion pounds of beef will be on the market - the lowest level in over a decade. Several of the world's largest pork and chicken producers, including Smithfield Foods Inc. (SFD), believe that chicken would soon join beef on the list of increasingly expensive meats. Companies like this one will see higher sales, and thus, stronger stock performance in the coming year. Others to consider are the exchange-traded note (ETN) iPath Dow Jones UBS Livestock Total Return Subindex ETN (COW). It has a 63.5% cattle component, with the remainder in hogs.

Packaged and Prepared foods are also where investors should look. Food is consumer based and while spending will slow and perhaps even stop in several sectors when the economy dips, spending on food will not.

Packaged food companies like Dole Food (DOLE) is a good look for investors. Last week it bettered its rating of C ("hold") to a B ("buy"). In Portfolio Grader's specific subcategory of Cash Flow, DOLE also gets an A. The stock price has risen 15.2% over the past month, better than the 3.3% increase the S&P 500 has seen over the same period of time.

J&J Snack Foods (JJSF) also saw a boost from last week's rating of B ("buy") to an A ("strong buy") last week. The company distributes a variety of snack foods and beverages for the food service and retail supermarket industries. Investors have pushed the stock price up 5.4% over the past month. In contrast with Dole, this company is growing its online presence. This means that it will multiply its existing market, accessing more people than just in store shoppers, and increase sales.

The Original Soup Man (OTCBQ: SOUP) is also one to put on the 'buy' list. With a market cap of about 17.3M, last week the stock was up 11.36%. With the current rating as Zagat's #1 'best-tasting soup in the world', the company is seeing tremendous growth. In over 3,000 supermarket chains across the United States, this company has recently announced that its shelf-stable, eco-friendly Tetra Pak carton soups are available on the shelves of Wegman's, a popular food and grocery store.

Food price hikes have unfortunately been a part of life this decade. Population growth has increased food demand while supplies are and will continue to be restricted. The United Nations' Food & Agriculture Organization has said global food output must rise 70% by 2050 to feed a world population that will grow to 9 billion, up from 7 billion now.

Because of this, food companies are considered by many to be a super safe investment, however, it must be the right food companies. Some will maintain sales by increasing prices as they are staples for consumers (such as wheat and poultry). Others should be considered for their security. The ever growing food demand creates great potential in food-related companies.

Source: Food Stocks Set For Strong Growth