Editor’s note: As you’ll figure out from reading Christan’s posts, she watches the markets for clean technology and alternative fuels very closely. At the same time, though, she’s not a licensed financial advisor, so nothing in her posts should be taken as advice to buy, sell, or otherwise take action in the markets. She’s not trying to push anything here — just offering her observations.

Maybe you don’t read the NY Times religiously, but hey…you don’t have to be Warren Buffet to know oil is going up, or that America is in the midst of a corn frenzy. Food prices are rising faster than inflation. All of a sudden people are trading in their SUV’s for hybrids and Wal-Mart is going solar. Home Depot even just slapped it’s new "Eco-Option" labels on 60,000 of their products…and now they sell organic worm poop? Boy, times have changed.

The Ripple Effect

The bottom line is that you don’t have to be a genius to know that the market is shifting. All you have to do is look at your grocery bill. The cost for some of the most basic food items has literally skyrocketed over the past year, thanks to our new ethanol obsession and record-breaking corn prices. Cola-Cola is even looking for a corn-syrup alternative. The price of raw milk jumped by 23% and a gallon may even set you back $5 by September. The ethanol demand is not just driving the price of corn up….it’s also having a ripple effect on everything from cotton balls to cornflakes. So, maybe we’ll end up saving a few cents at the pump, but we can all count prices going up for 1300 other consumer products.

How to Start Investing in the Ethanol Rush?

Well, for starters, it’s definitely not with an ethanol producer! These companies are the epitome of volatile and super sensitive to both oil and corn prices. Why? Simply because U.S. ethanol is made from corn, and then transported by rail or truck, which both use oil.

Expensive + Expensive Oil = Skimpy Net Profits…and that doesn’t make a very sexy balance sheet. Then, when some of America’s largest ethanol producers started fetching stock prices lower than their IPO’s, Wall Street started to lose interest, and investors began looking for other ways to profit from America’s ethanol binge. Where exactly are investors looking now? Outside of the "ethanol box", that’s for sure…

4 Ways to Profit from the Ethanol Rush

1) Corn-Related Farm Products

Fertilizer, soil conditioners, agricultural machinery, genetically engineered seeds that can increase crop yields, etc. are gaining popularity with farmers. Because of the stress being put on increasing output, companies that can provide products that will enhance yields while reducing input costs will increase in demand.

Why Now?

Farmers are feelin’ good and making more loot than ever. With pressure to be even more productive, they don’t want just any kind of corn-seed, they want really “special” seeds (AKA: "genetically modified"). In addition, with climate change making weather conditions unpredictable, seeds that grow drought & disease resistant crops will be ideal.

Hot Picks:

Monsanto. They’re the largest corn-seed producer in the world, genetically modified seeds are their specialty and US farmers are flocking to them for supplies. DuPont has some pretty hot kernels too, but they produce all sorts of agricultural products, allowing Monsanto the company of choice for the entire farming sector. More corn to grow = More seeds to plant.

2) Agricultural Machinery

Why Now?

This year, farmers planted 90.5 million acres of corn, the largest crop since WWII. Within just 5 years, we can expect to see ethanol production triple. It’s sure going to take a lot more corn to produce all that ethanol! With more corn to grow, farmers are forced to extend their acreage. With more land to farm, incentive to produce, and farmers making more money per bushel…farmers are demanding more agricultural machinery.

Hot pick:

Deere & Co., the world’s largest maker of farm equipment takes the cake. If you bought this company this time last year, you’re probably one happy clam right now. BusinessWeek is calling them a "Revolution on Wheels" because it’s not just U.S. corn farmers who are scrambling to buy its products, either: farmers in developing countries are demanding Deere quality too. Other farm equipment and agro-processing companies like Agco Corp, CNH Global NV, and Bunge are typically in a position to gain momentum when commodities are hot.

3) Capitalize on Soft Commodities

Why Now?

It’s no mystery corn’s pretty pricey right now. But with the biofuel boom, oil prices high, and 1.4 billion people in China that don’t plan to stop eating any time soon, analysts are predicting that prices for a slew of other crops are expected to skyrocket, just like corn. For instance, we can already seen this with sugar. Sure, that sweet goodness seems super cheap right now, but it’s actually at 24-year high. Then, factor in Asia’s rising sweet tooth and the fact that 60% of the world’s ethanol is produced from sugar….and we’ve got one big "sugar high" on our hands. Bottom-line: as we begin divert our food crops to fuel, supplies will decrease, giving way to rising demand for raw materials.

Hot Pick:

The Rogers International Commodity Index is a favorite amongst anyone wanting to benefit from commodities. It’s created and managed by the investment guru, Jim Rogers. The other “edge” that investors like about this this index is that it contains 35 different commodities (weighted according to their importance in international commerce), making it much more diversified than the other indices. Another easy option is to buy "Rogers TRAKRS," which allow investors to gain exposure to agricultural, energy and metal commodities with just one transaction. There’s no minimum, and it’s similar to buying a share on a stock exchange. It’s that easy. More information can be found here.

Other Commodity Index Funds:

• Oppenheimer Real Asset Fund
• PIMCO Commodity Real Return Strategy
• Goldman Sachs Commodities Index
• Deutsche Bank Liquid Commodities Index
• Dow Jones AIG Commodities Index

*You can also buy other ETC’s and ETF’s (“Exchange Traded Funds”) that invest in a particular index. The fees are minuscule, and you can take your investment out at anytime.

4) Profit from the Packaging

The price of raw materials is on the rise, and a way for commercial retailers to cut costs is by using affordable, eco-friendly packaging. Something biodegradable, and made from something ridiculously cheap and NOT petrol-based will help maximize profits. Keep an eye out for anything recycled too.

Why Now?

For starters, commodities like sugar, coffee, soybeans, corn, wheat, oil etc. are all hitting record highs, meaning more expensive grocery bills for consumers. As a result, the efficient, low-cost packaging just became incredibly important.

Hot Pick:

Metabolix (MLBX), the maker of a biodegradable sugar-based plastics has developed over 60 different types of applications for consumer products, agricultural products, and packaging. They also just partnered with ADM, the biggest ethanol producer in the United States. As environmental regulations continue to gain momentum, major corporations will be looking to "green" packaging companies to help increase their profits.