Potash (NYSE:POT), Agrium (NYSE:AGU), Mosaic (NYSE:MOS) and the Food Price Play

With the price of food soaring around the world, some wonder what the best way to play that long-term trend.

As far as it relates to equities, the majority look to the fertilizer sector as the most profitable investment area within the food price arena.

Obvious plays are the fertilizer giants like Potash (NYSE:POT), Agrium (NYSE:AGU) and Mosaic (NYSE:MOS). All three of them have continued to skyrocket since July of 2010, and are all are up by around 100 percent since then, or higher.

With farmers in America and some other places flush with cash after a successful season, they're ready to spend on fertilizer and other inputs to enhance their businesses.

All the major fertilizer companies should continue to move up in value and price, so to look for the most profitable company the idea of the most probable takeover candidate could be the best way to look at it.

The attempt by BHP (NYSE:BHP) to takeover Potash seems to reveal they're not going to be allowed to be taken over by the Canadian government, and few companies in the world could afford them now.

Of Agrium and Mosaic, Mosaic is considered the most likely candidate for a takeover, based on its share price in relationship to the overhanging supply of MOS stock.

But all three companies look solid because of the overall fertilizer sector which they operate in.

Valuation is of course a problem since they haven't stopped running up since July, but as usual, buying on the dips would be beneficial for investors wanting to play food prices, and all three companies, as they stand now, should do well going forward.

Potash closed Friday at $181.44, down $0.73, or 0.40. Agrium closed at $91.70, dropping $0.32, or 0.35 percent. Mosaic ended the session at 482.53, falling $0.49, or 0.59 percent.