WILLMAR, Minn. — The steepest run-ups in food prices since 1990 are hurting grocery shoppers, restaurants and school cafeterias but they're making others rich.

The winners in the new food economy include crop farmers selling corn and wheat for near-record highs after years of crushingly low prices. Ingredient makers like Cargill and ADM are rife with profits. Fertilizer and tractor companies are cashing in. Hedge funds that made big bets on rising wheat, soy and corn were spectacularly correct. Oil and gas companies, too — it takes natural gas to cook those Wheaties and diesel to haul them around the country.

Travel along the nation's food chain and you'll find some of the biggest profits closest to the land. The nation's farmers, who raise everything from cows to cucumbers, saw their average household income climb about 7 percent last year to more than $83,000. But in grain-rich states, the results were dramatically higher. In Minnesota alone, the median income of crop farmers soared 80 percent to $95,000.

That brings us to Chad Willis.

BIG SPENDING

Willis raises corn and soy beans on 550 acres near Willmar, some of the nation's best corn-growing country.

He sells his grain nine miles up the road from an ethanol plant he invested in. His family cars are powered by an 85 percent blend of the corn-based fuel. His black- and gold-trimmed cap reads "E85 Everywhere." And he knows that grocery shoppers jolted by higher prices of cereal or eggs or chicken think it's because of ethanol, which consumed 20 percent of last year's corn crop.

Willis isn't saying how much he made last year. While he acknowledges these are good times to be a farmer, he says he's not pulling in as much as the median income of crop farmers.

"Most people are excited, yes, but cautious about when things are going to turn around, and how hard it's going to turn around," he said.

In between Willis' farm and town, the owners of Haug Implement are having some of the best times anyone can remember. The Deere & Co. dealer sells farm tractors that can run to $160,000 or more and combines that can cost $300,000, a major investment even in the best of times.

Normally Haug would still be taking orders for combines for delivery for the fall harvest. But Deere cut off new orders in mid-November because demand was so high.

"We're seeing some substantial purchasing," said owner Donald Haug Jr., "and we're talking over $100,000, and the guy just strokes the check for it," he said.

GRAIN IS GOLD

Boom times have arrived in farm country. Corn, soybean, and wheat prices have been pushed to record or near-record highs by a combination of high demand and new money from hedge fund traders who used to show little interest in those markets.

"Grain farmers are making a hell of a lot of money," said Peter Georgantones, president of Investment Trading Services, a commodities brokerage in Bloomington, Minn. "I got grain farmers — a ton of them — who are going to improve their net worth this year — net, now — by a half a million bucks minimum. For one year. That's a nice gain. Not to mention their land's worth more."

Every few minutes his office phone rings with a call from a farmer checking crop prices.

"These guys, they grow 60, 70, 80 thousand bushels of beans," he said. "I got guys sitting on $2 (million), $3 million worth of grain right now. Farmers are making good money."

COSTS UP, TOO

The International Monetary Fund estimates biofuels accounted for almost half the increase in consumption of major food crops in 2006-2007, propelling the prices of corn, other grains, meat, poultry and dairy.

Others dispute that. A report last month from the Agricultural and Food Policy Center at Texas A&M University said higher corn prices have had little to do with rising food costs because other factors, such as rising energy costs, have had as much or more impact.

Willis, the farmer near Willmar, is quick to point out that farmers pay much of those profits right back out to their own suppliers.

The liquid propane that runs his corn drier cost $1.55 a gallon last year. He's been told to expect to pay $2 this year. Fertilizer last year ran $115 per acre. This spring it cost double that. He bought 2,500 gallons of diesel fuel for his tractors last year, at a price that started at $2.50 a gallon and rose to $3.09 by the end of the year and has risen further since then.

"You look at the grain prices, yeah, that's nice," he said. "But everything's going up right along with it."

PROFITS ALL AROUND

While virtually all businesses are contending with higher energy costs, the rising commodities prices are proving to be bottom-line boosters for other sectors.

Profits at seed and pesticide maker Monsanto Inc. reached nearly $1 billion last year — a 14-fold increase since 2003. They've tripled to $1.1 billion at agrichemical maker Syngenta, and the agriculture divisions of DuPont Co. and Dow Chemical Co. have also seen their earnings balloon.

Cargill, which makes ingredients and trades in commodities markets, boosted its profits to $2.3 billion, up nearly six-fold since 2001.

Profits at agricultural processor Archer Daniels Midland Co. have more than quadrupled to $2.16 billion in the same period.

Fertilizer makers are winning big. Mosaic Co. saw its third-quarter profits jump tenfold to $520.8 million because strong demand from farmers is giving it power to raise prices. Companies like Deere, the world's biggest maker of farm machinery, are in flush times, too.

"Everybody is getting their little piece. Everybody wants a piece of the pie," said Lee Richardson, a 37-year-old farmer from Willards, Md., who's seen the robust profits of his grain harvest consumed by the increasing costs of raising more than 1 million chickens annually on his family's 2,200-acre farm

PRICES SPIRALING UP

Food prices in the U.S. rose about 4 percent last year, the fastest rate since 1990, according to the Agriculture Department. Some rose much faster. White bread prices rose 13 percent last year, bacon 7 percent, peanut butter 9 percent.

And it's picking up speed. Food inflation is running at an annualized rate of 6.1 percent as of April, the Bureau of Labor Statistics reported on May 14.

In addition, a weakened dollar makes American produce cheap and desirable abroad while weather-wrecked harvests in some foreign countries have generated regional scarcities, increasing global demand. And emerging economies in India and China are creating nations of residents demanding higher-quality ingredients and food.

The rising prices are forcing changes at food and ingredient buyers such as Kraft Foods Inc.

Kraft Foods has seen its commodities costs grow 9 percent, or $1.3 billion. This year, the company expects to see an even bigger input cost increase.

It's raising prices across the board, but the food maker is also changing some product packaging to save money. It switched its classic Miracle Whip jar from glass to plastic. The lighter packaging will save Kraft 87,000 gallons of fuel a year, said spokesman Mike Miller.

Even if this year's global harvest is robust, don't expect big price breaks anytime soon. The USDA predicts food prices will rise another 4 percent to 5 percent this year.

"We're in a new era," said Mike Helmar of Moody's www.Economy.com.