Next time you go to the grocery store, check the price of your favorite cereal… Is it more expensive than the last time you bought it?

Chances are, it is… In the past few months, food prices have surged. Take a look at the chart below.

As you can see, corn prices are significantly higher than the beginning of the year. In fact, since June alone, prices have surged more than 40%.#-ad_banner-#

Rising corn prices are a problem… and not just for those who enjoy the yellow vegetable at dinner time. As one of the most important commodities on Earth, corn is used in everything from horse feed to toothpaste. It’s estimated that close to 75% of the foods we buy at the grocery store contain corn. If the price of corn continues to rise, then everybody will likely feel the repercussions.

One of the reasons for the price increase is the ongoing drought in the Midwest. Because corn is one of the largest agricultural crops in the United States, record temperatures and historically low rainfall could continue to push corn prices higher.

For investors, this means it’s probably a good idea to stay away from any company that lists corn as a major input cost. This goes for ethanol producer or any food company that could be hurt by the rising price of animal feed… For example, companies such as Tyson foods (NYSE: TSN), Yum! Brands (NYSE: YUM) and Chipotle (NYSE: CMG).

Risks to Consider: Like all commodities, corn prices can be extremely volatile. If the conditions in the Midwest improve for farmers, then we could see corn prices fall from current highs.

Action To Take –> Elevated corn prices are expected to push food prices another 2-4% higher next year, according to the USDA. As farmers plant more seeds in an attempt to take advantage of rising prices, a pesticide producer like Monsanto (NYSE: MON) could prove to be a good investment, as my colleague Michael Vodicka said in this article.

P.S. — Soaring corn prices are just one of 11 shocking predictions StreetAuthority’s Andy Obermueller recently made to readers of his Game-Changing Stocks newsletter. To find out the rest of his predictions — and how you can profit — read this special report.