In a gold rush, the firms that supply the gold diggers with tools — not the gold diggers themselves — make the highest and steadiest profits. That’s a platitude, but it’s also usually true. And it’s now playing out in the boom in corn-based ethanol.

Don’t waste much time envying corn farmers. Sure, they’ve seen the price of their product double over the past year and a half or so. But they’ve also seen their costs inch up. Fertilizer, land rents (much of the farmland in the midwest is rented), pesticides, and seeds — all have risen since the corn rally. Before long, much-heralded “record farm income” in the corn belt will likely evaporate under those pressures.

As for ethanol producers — the ones buying up all that corn and spinning it into auto fuel — even they’ve seen their profits drop, despite heavy government support. They flooded the market with so much ethanol, so fast, that they overwhelmed it, leading to a glut. Helpfully, though, the federal government solved that problem, for a few years at least, with the 2007 Energy Act and its lofty ethanol mandate.

Reader support helps sustain our work. Donate today to keep our climate news free.

Corn farmers and even ethanol producers are pikers compared to the input suppliers — the firms that peddle the special seeds and chemicals required for industrial-scale agriculture. And the granddaddy of all those firms, the genetically modified seed and herbicide giant Monsanto, just delivered what’s known on Wall Street as a “blowout” quarterly profit report.

Grist thanks its sponsors. Become one.

In the three-month period that ended Nov. 30, Monsanto reeled in profit of $256 million. That’s nearly three times the amount it made in the same period of a year earlier, and well more than Wall Street analysts had expected. Monsanto shares, which more than doubled in value over the course of 2007, leapt more than 9 percent in Thursday afternoon trading on the news.

How did Monsanto pull off this neat trick? By selling boatloads of herbicide and genetically modified corn, Reuters reports:

Sales of corn seed and traits during the quarter jumped to $467 million from $360 million a year ago, while sales of its Roundup and other glyphosate-based herbicides climbed to $1.0 billion from $649 million.

The company told Wall Street to expect more of the same in 2008, boosting earnings expectations significantly.

Grist thanks its sponsors. Become one.

South America — particularly corn-happy Argentina and soy-mad Brazil — has been a main driver of Monsanto’s profitability, sucking in mass quantities of the company’s flagship herbicide RoundUp, to complement RoundUp-Ready corn and soy, AP reports.

The company expects to bring in a cool billion in gross profit from RoundUp alone in 2008, according to AP.