By Sameer Mohindru And Patrick Barta

SINGAPORE—A rush by farmers to expand plantings in many parts of the world is raising expectations that food prices may retreat as early as the second half of this year if weather conditions remain favorable.

The global rally in food prices over the past year has pushed prices of wheat, corn and soybeans to their highest levels since 2008, when food riots spread across the globe. This time, concerns over food costs have contributed to the latest unrest in the Middle East, and left many national governments scrambling to find solutions to keep disturbances from spreading further.

But the most powerful response seems to be coming from farmers themselves, especially in places like Russia, Brazil and Australia.

Global wheat acreage, for instance, is expected to rise 3.1% to around 224 million hectares in 2011, with production climbing 4% to 670 million tons, the London-based International Grains Council said in a recent report. In Russia, where production fell following a severe drought last year, wheat acreage could rise by more than 15%, according to the IGC.

Brazil has begun harvesting what may be its largest soybean crop ever, while rains have given Argentina's soybean crop a boost after dry weather threatened to wipe out its crop as recently as in January.

High prices may raise U.S crop area by four million hectares to 103 million hectares this year, the U.S Department of Agriculture said in its long-term projection released last week. The USDA has projected U.S corn and soybean plantings rising 4.3% and 0.3%, respectively, in 2011.

"Agricultural investment spending has never been higher—orders of magnitude larger than during the previous food-price boom in the mid-1970s," when inflation gripped much of the globe, analysts from UBS wrote in a report released Tuesday.

Although that doesn't necessarily guarantee prices will fall given unpredictable weather and rising demand in places like China, "it does show that economics works, that price incentives lead to an investment response—and this may well become a more salient issue if and when other conditions normalize," the report said.

A number of analysts still believe it is much too early to call a turn in the market, especially if some of the new plantings don't come through—which is always a big risk in agriculture, either because of weather or other factors. Farm production is already at or close to record levels in some countries, and it may prove harder to expand output than expected.

It is also possible that other inflationary forces—including an increase in oil prices, or rising wages in some parts of the world—could filter back through the agricultural sector and keep prices from easing.

Even if production does increase significantly in the next year, analysts say, it might not come close to solving the world's longer-term supply issues, especially as incomes in China and India rise, boosting their demand for foods. A more dramatic expansion of the world's food supply would likely require years of investments to clear new land, expand irrigation and build milling and storage facilities. Achieving all of that will be difficult, especially in developing countries like Indonesia, Cambodia or parts of Africa, which have lots of unused arable land but major bureaucratic hurdles, complicated land ownership rules or shortages of capital for agriculture.

Still, it's possible some regions could see food-price relief faster, depending on their mix of crops and local weather conditions. For instance, economists at Barclays Capital in Singapore argued in a report this month that for Asia, at least, "the impact of higher raw food prices has peaked," in part because of restrained prices for rice. Rice is key to diets in Asia, and improving production in the region has lowered expectations for import demand in 2011-12.

The Philippines, Bangladesh and Indonesia were major rice importers last year. But the IGC now expects Bangladesh's rice output to rise 5% to 32 million tons in the current crop year to June 2011, meaning lower or no imports. The Philippines, the largest rice importer last year with total imports of 2.45 million tons, has said it expects imports to remain below one million tons this year. Rice prices haven't risen significantly this year, with one common variety, Thai 25% broken rice priced at roughly $475 a ton.

IHS Global Insight, a forecasting firm, likewise predicted this month that global food prices would likely ease by the second half of this year as production recovers in some regions following recent weather problems—assuming weather disasters aren't repeated.

The scope for farm-acreage expansion is the highest in the Black Sea region and Brazil, said Abdolreza Abbassian, secretary for the Intergovernmental Group on Foodgrains at the Food and Agriculture Organization of the United Nations. In 2007-08, there was a collective crop failure in major exporting countries, but when the weather turned around, production rose sharply the following year, he said, suggesting the possibility of a similar outcome this time.

The Indian government, meanwhile, has taken a number of steps, including increased distribution of seeds and fertilizers, to substantially boost production. As recently as in the last decade, India was struggling to push annual wheat production beyond 75 million tons, but it is expected to hit a record 81.47 million tons this year, the third year in a row when output exceeds 80 million tons, making the country a potential exporter. India's oilseeds plantings are also off to a good start, with winter plantings rising 2% from a year earlier.

China's corn plantings rose 4.2% to 32.5 million hectares in 2010, after an increase of 4.4% in 2009, according to China National Grain and Oil Information Center. An even bigger area is expected to be planted this year. China is facing a drought in its wheat-producing regions and authorities have warned production could fall if the country doesn't see sufficient rain in coming months.

Australia, which saw wheat production rise above 26 million tons this year despite a drought in Western Australia and widespread flooding in the eastern states, is aiming for a record output of nearly 30 million tons next year after wheat growers in eastern Australia have harvested their most profitable crop in a decade with gross margins estimated at 350 Australian dollars (about US$353) a hectare. That is A$100 per hectare above the long-term average, said Paul Deane, an agricultural economist with ANZ Banking Group in Melbourne.

If the wheat harvest in the Northern Hemisphere is bigger, as expected, the July-August period can be the turning point for grains and drag wheat down to $6.40 a bushel, said Nobuyuki Chino, president of Unipac Grain, a Tokyo-based commodities trading company. March wheat futures on the Chicago Board of Trade are currently trading around $8.27 a bushel, just off a high of $8.93 per bushel tested earlier this month.