Economists love to talk about things like labor productivity and inventory accumulation when gauging the health of the economy.

But to regular folks, what really matters are things like the cost of a gallon of milk and the price of a loaf of bread -- and how hard they've got to work to pay the bills.

For the better part of 30 years, food wasn't a big deal. It was cheap and plentiful. Incomes were supported by the dot-com bubble and its jobs boom; then, household wealth was bolstered by the housing bubble.

By just about any measure you'd care to use, things have changed. Now, more than 22 million households comprising 45 million Americans rely on government food stamps to put food on the table -- despite the fact the average monthly benefit amounts to just $134 per person. This is up from 12 million households before the recession. Nearly 230,000 participants were added to the program in December, a sign the problem remains acute.

It's no wonder people are struggling.

Food inflation did slow briefly late last year as the global economy suffered a slower-growth scare, but it has resumed. The U.N.'s measure of food prices -- which includes things like meat, sugar and grains -- is on the rise, up 5% since December. Over the past year, daily prices are up 9% (versus the 10-year annual average increase of near 3.5%). Meat, poultry, fish and eggs are up more than 7% (versus the 10-year average of around 3.5%).

Image: Anthony Mirhaydari

Anthony Mirhaydari

Although agriculture will ebb and flow with the seasons and the vagaries of Mother Nature, this trend of ever-more-expensive sustenance seems locked in. Demand for food could as much as double by midcentury. For most American consumers, this will be just another bother. For some, here and around the world, it will mean going hungry.

And for investors, it could be one of the few consistently profitable themes of the next few years. Here's why, and how to participate.

The end of cheap food

This phenomenon started in 2008 as commodity prices spiked just as home prices plummeted and the financial markets seized. The cause was a combination of factors: using food for ethanol-based fuel, the growing middle class in China and elsewhere (which raises demand and prices), a jump in oil prices critical to transportation and volatile weather conditions in critical growing regions.

FAO Real Food Price Index © MSN Money

After a brief respite during the depths of the recession, food prices surged again last year. Bad weather and wildfires in Russia, Australia and Argentina, followed by Moscow's wheat export ban, were the cause. And the consequence was higher prices which helped fuel the Arab Spring in Tunisia, Egypt and Libya and social unrest in places like Jordan, Mozambique, and Algeria. Lingering aftereffects have kept the food price index compiled by the U.N.'s Food and Agriculture Organization (FAO) above its 2008 peak.

When I wrote "Is this the end of cheap food?" last year, I warned that the rise likely marked the beginning of a new era. At the time, Credit Suisse researchers led by Edward Morse noted that while "the predominant short-term cause for most food price spikes in recent years has been supply disruption, it is possible that over time, increased demand from emerging markets could slow or even halt the long-term downward trend in food prices evident for at least the past 100 years."

A little more than a year later, the case for higher food prices has only grown stronger -- for the following reasons, outlined in a recent report (.pdf file) by the British government:

A weak dollar. The Federal Reserve is committed to lowering the value of the dollar as a last-ditch effort to ease the pain of cutting debt, public and private. Much of the cheap money it's creating will find its way into commodity markets as speculators search for ways to fend off the resulting inflation. More inflation will further erode the purchasing power of the dollar, increasing the cost of goods. With wages stagnant, that puts pressure on household budgets. Thus, we see the rise in the use of food stamps.

Higher oil prices. Energy prices affect food prices in a number of ways. Higher crude oil prices increase the desirability of biofuel alternatives -- with current U.S. ethanol policies already boosting corn prices by around 40%, according to some estimates. It also increases the cost of production via oil-derived fertilizers and on-farm energy use. I wrote about the potential for crude oil to push past $200 a barrel because of Fed policy errors in "Will Fed push oil to $200 a barrel?"

Tighter water supplies. You can't have food without water. And water, as I explored last summer, is an increasingly constrained resource. Indeed, Ismail Serageldin, the World Bank's leading environment expert, warned that the "wars of the 21st century will be fought over water."

According to the United Nations, 50% of the global population will be living in water-stressed regions by 2030. By this time, an additional 10% of farmland will be put into use. That will increase total water demand by 14%.

Rising demand. The number of souls on this planet is expected to increase to 9.2 billion by 2050 -- resulting in a 70% to 100% increase in the global demand for food. Rising incomes in the developing world will complicate matters as more people in places like China, India and Brazil adopt a Western-style diet that includes more meat. That's a problem, because protein from meat requires more resources in land, feed, water and energy to produce, taxing the global food-supply chain.

Americans lead the world with the highest proportion of grain-fed meat in their diets, and that puts a strain on crops and water supplies. Americans' meat habit translates to a per-capita requirement of grain four times that of a vegetarian diet. After all, it takes eight pounds of grain to produce one pound of red meat, according to U.N. estimates.

Continued on the next page. Funds mentioned include: iPath DJ-UBS Grains Total Return Sub-Index ETN (JJG), Market Vectors Africa-Index (AFK, news), iShares Latin America 40 Index (ILF, news), Market Vectors Agribusiness (MOO, news) and Global X Fertilizers/Potash (SOIL, news).