Although meat-and-dairy prices are expected to zoom even higher from their current record levels, this slice of the commodities boom won’t be a slam-dunk profit play for investors: Many food producers are watching the revenue gains they’re reaping from the rising market prices get wiped by even bigger spikes in commodity-related expenses.

“We are in the early stages of what will become a big mess for producers” of food products, including meat-and-dairy offerings, Greg Wagner, a senior analyst at Ag Resource Co., told the Dow Jones News Service. Over the next few years, retail food prices “will rise like never before.”

At a summit in Rome held by the UN’s Food and Agriculture Organization, UN Secretary General Ban Ki-moon said world food output needs to rise 50% by 2030 in order for the growing population to be fed.

“Soaring prices of grains, dairy and meat have been grabbing global headlines,” says Jennifer Yousfi in Money Morning, “but other commodities have been on the rise as well.

A perfect storm is gathering that may make investing in a livestock ETF one of the best profit plays for 2008.

According to a report by Bloomberg, cattle prices may rise 13% by the end of the year on the Chicago Mercantile Exchange and Brazil’s Bolsa de Mercadorias e Futuros. More from this story:

Not since 1996, when corn reached what was then a record $5 a bushel, have cattle been this cheap relative to their primary source of feed.

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The time is right to invest in a livestock ETF. Livestock prices have remained cheap over because grain prices have remained low. But this has changed… and an ETF is a great way to play the upswing in livestock prices.

“Hogs, like most commodities, went nowhere for 30 years,” says Ian Davis in The Growth Stock Wire. “In 1977, hogs sold for about 55.5 cents per pound. Today hogs sell for only about 79 cents per pound. That’s a rise of 42% in 31 years, or an annualized return of 1.1%… well below the inflation rate.

A livestock ETF may not sound like a sexy investment, but it may be a great way to profit from high grain and livestock prices.

AP reports that grain prices ended mixed last week on the Chicago Board of Trade. However, livestock prices rose, with beef and pork futures climbing on the Chicago Mercantile Exchange — a strong indicator that a livestock ETF may be a great way to cash in on the ongoing surge in food prices.