Al Gore's efforts to raise awareness about global warning earned him a Nobel Peace Prize. Shareholders of farm equipment manufacturers are reaping rewards, too. Financial ones.

Yesterday, Dutch manufacturer CNH Global (NYSE:CNH) reported a 36% jump in farm equipment sales, contributing to an 82% rise in net income, which sent the stock up nearly 11%. Rivals Deere (NYSE:DE) and Kubota (NYSE:KUB) rose as well. Year to date, CNH shares are up more than 130%.

CNH is benefiting from high prices for corn, wheat, and soybeans -- all of which are being driven by demand for ethanol, which is supposed to reduce the use of fossil fuels, a major cause of global warming.

Let's back up. Concerns about global warming have led many to promote alternative fuels. This has led to growing demand for ethanol, which has created greater demand for corn. In turn, corn prices hit a 10-year high earlier this year. Last spring, the U.S. Department of Agriculture projected that farmers would devote 15% more land toward corn production, leaving fewer acres for other crops, including soybeans and wheat. Lower supplies of those crops sent their prices rising as well, meaning more income for farmers and more money to spend on tractors. Thus, CNH's boom quarter.

Gone too far?
Now, of course, markets of all kinds can overreact. So is it possible that the ethanol boom might be overbought? Recent research suggests that it takes 1,700 gallons of water to produce one gallon of ethanol. And while the USDA cites studies that trumpet ethanol's energy efficiency, other studies argue that it takes more energy to make the ethanol than the ethanol produces. Perhaps ethanol isn't the solution to all our environmental problems. If not, you have to wonder what will happen to corn prices when it sinks in. Ethanol prices have already come down about 30% over the past few months. Can corn be far behind?

For diversified corn processors such as Archer-Daniels-Midland (NYSE:ADM) and Corn Products International (NYSE:CPO), that won't be a problem. They'll survive to raise ethanol prices after smaller processing plants are forced out of business. But pure-play VeraSun Energy (NYSE:VSE) might have a tougher time of it.

Meanwhile, equipment makers such as CNH will also take a hit. Luckily, though, CNH isn't dependent on farmers alone. It makes dozers, forklifts, excavators, backhoes, and other general construction equipment and has benefited from the worldwide boom in infrastructure. Sales in CNH's construction segment rose 28% overall in the latest quarter, including 69% in Latin America and 39% in Western Europe. And gross margins in the ag and construction equipment segment expanded by almost 2%.

So even after the ethanol fad passes, CNH might be worth a look as a way to profit from the infrastructure boom. In the meantime, though, shareholders should give a toast to the former vice president to celebrate the company's outstanding results.

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