CORN ISN'T SUCH

a great fuel. By the time you've fertilized, harvested, transported and processed it into a gallon of ethanol, you've used three-quarters of a gallon of oil. Better to buy sugar from Brazil. There it is turned into that same gallon of ethanol with just a pint (think Ben & Jerry's) of crude oil.

Perhaps after Iowa has voted in this year's presidential election (cynical, I know), politicians will realize that providing big payments to corn fuel makers isn't a good idea. Aside from the cost in fresh debt, there's the financial burden borne by another special-interest group: people who eat food. Corn inflation has increased the price of most items on an average grocery bill, either because they're made using corn or because they're made from a grain farmers have swapped out of in favor of it.

If you believe grain prices will ease on either a policy change or a broad economic slowdown, you might have a look down the cereal aisle for stock bargains. General Mills and its peers have been busy raising prices to make up for higher ingredient costs. (For cereal, General Mills technically shrank boxes rather than increase prices, but the effect is the same.) The price hikes have "stuck," as analysts say, meaning customers haven't bought significantly less. If ingredient prices fall, presumably part or all of the higher product prices will remain stuck, resulting in a boost to profit margins.

Not that General Mills is struggling with margins now. Over the past year it turned 16.8 cents of each sales dollar into operating profit. That's better than the margin achieved by a long list of supermarket stalwarts, including Kellogg, Kraft Foods, Sara Lee, Campbell Soup and J.M. Smucker. Higher prices have helped, but so have efficiency efforts and attention to product assortment. This year the company plans to launch dozens of margin-enhancing products, many of them brand extensions (Cheerios snack mix) or products aimed at dieters (Curves popcorn).

General Mills turned up recently on a search for stocks with limited trading volatility and modest share prices. It goes for 16.6 times trailing earnings, on par with the S&P 500 index. For the fiscal year ending May 27, the company's profits are expected to increase 8.5%. The stock has been only a quarter as volatile as the broad market over the past three years. Since mid-October, while the S&P 500 has declined 14%, General Mills has fallen just 6%.

To create your own list of stocks that tend to hold up better than the broad market during downturns, use SmartMoney's stock screener and list of search criteria. Recently the search produced eight survivors from a starting database of 8,000 companies.