IN the 1950s we rode on the sheep's back when wool prices soared. This decade it is minerals that are delivering prosperity.
The next page in the Lucky Country's story could be food.
The weather forms a large question mark but, if recent rises in global food prices - the so-called "soft commodities" - and fundamental trends in food demand are any guide, the omens are good for Australian farmers.
Prices of wheat, dairy, barley and beef have reached historically high levels.
And even allowing for the cyclical fluctuations, the consensus is that prices will remain at higher levels than in the past.
Despite a strong Australian dollar, Rabobank senior dairy analyst Tim Hunt says Australia, which exports two-thirds of what it grows, is in the box seat to enjoy the high prices.
Ron Storey, managing director of Melbourne-based Australian Crops Forecasters, said that, weather permitting, Australia was well placed to supply food to the world, especially Asia.
Rising crude oil had translated into higher freight costs, and Australia's proximity to Asia was an advantage, he said.
At $US745 billion, the global cost of imported foodstuffs in 2007 is 21 per cent higher than in the previous year and the highest level on record, according to theUN's Food and Agriculture Organisation.
The global FAO Food Index rose 37 per cent this year, with dairy and grains leading the price surge. The prices for all soft commodities, apart from sugar, have risen dramatically.
Wheat in September traded up to 80 per cent higher than last year, partly because of a shortfall in our drought-affected harvest.
Wheat futures prices for December delivery on the Chicago Board of Trade hit a record of $US350 a tonne on September 28, partly in reaction to further reduction of the forecast for this year's Australian crop.
The price of dairy products has risen by between 80 and 200 per cent in the last month.
FAO said that, as of September, skim and whole milk powder prices were each up by more than 125 per cent year on year.
Bill Barbour, investment specialist with DWS Asset Management, said food inflation was causing grave concerns in many countries, with riots reported in Italian cities over the rise in pasta prices. Mr Barbour said the world had 0.5ha of crops under cultivation for each person in 1950. Today, it is 0.3ha and expected to shrink to 0.2ha in 2020. In India, onion prices have been causing political problems and the Government banned dairy product exports for 10 months this year to help stabilise domestic prices.
Chinese authorities have kept a watchful eye over the sharp spikes in the price of chicken, eggs and pork, because of spiralling inflation.
Mr Hunt said the Russian Government had frozen food price increases until January next year, while Vietnam's Government had cut tariffs on food imports to curb prices.
Mr Hunt said Argentina imposed a 15 per cent export tax on beef last year and continued to restrict exports of beef.
Ali Arslan Gurkan, the FAO's chief of commodity markets and policy analysis, said the world's food production was starting to trail behind population growth and expected growth demand for food, especially protein.
According to the experts, this food "perfect storm" has been caused by the confluence of falling global stockpiles, weather (droughts or floods), a weak US dollar, soaring input costs from oil to feeds, the biofuels industry eating into crop availability and, not least, people wanting better food as their incomes rise.
Mr Hunt said the major producers, like the EU, had run down their stockpiles, such as for butter, because of new government policies. "Now the cupboard is empty. Any demand growth will have to be met from supply," said Mr Hunt.
The rise in demand was expected but the development of biofuels was not.
Ethanol production now consumes a third of the corn grown in the US.
If the crude oil price stays above $US65 a barrel, said Mr Gurkan, corn-based ethanol would be competitive.
Mr Gurkan said if the use of ethanol continued to grow, in a decade it would swallow the entire present level of US corn exports.
High corn prices had triggered a chain reaction - higher feed for livestock, in turn lifting the price of chicken, pork and beef.
Japan, China and Southeast Asia rely on US grains to feed their livestock.
Mr Gurkan said that historically supplies had been able to catch up with demand.
The EU has started to release land set aside for preservation to grow crops again.
Mr Gurkan said Australia was one country well positioned to target (high-end) niche markets like dairy with ingredients for the processing of cheese and powdered milk.
Ingrid Robertson, senior food analyst with Rabobank, the world's largest agricultural bank, agreed Australia had the ability to move into the premium end of the market.
She said Australia already had the technology to sort wheat into many grades.
While Australia benefits from the current surge in global prices, its ability to participate is "extremely limited" because of supply constraints.
Australia will have to contend with climate change.
Production of milk, wheat and other commodities is down because of the drought.
Milk production had been down five out of the past six years, Mr Hunt said. This year's production would be 20 per cent below last year's production. But he added: "We still export 45 per cent of what we produce."
Lack of irrigation water was a critical issue in northern Victoria, said Mr Hunt.
Australian Bureau of Agricultural & Resource Economics chief economist Don Gunesekera said Australian farmers had shown that they were resilient over the past 30 to 40 years.
Dr Gunesekera said the question was whether farmers would be able to adapt to further change. He believed research and development currently under way on drought mitigation would help farmers to adapt and - it was hoped - maintain productivity.
