Fertilizer. What a joke, right? Just as with Pets.com back in 2000, investors bought into another crazy bubble story about turning something mundane into something magnificent.

But wait a second. There is at least one slight difference. The fertilizer companies weren't just projecting future profits. They were -- scratch that, are -- making real money by the truckload.

Look at PotashCorp (NYSE:POT). In the recently tallied third quarter, the company earned a gross margin -- sales net of selling costs like ocean freight -- of $1.7 billion. Gross margin is driven largely by the company's namesake mineral fertilizer, and this company, like the Saudi Arabia of potash, has some of the only spare capacity in the world. As demand has grown and supply has tightened, PotashCorp has increased volumes and especially prices, translating to huge gains.

Earnings this quarter exceeded those for the entire record 2007 fiscal year. Chew on that for a moment.

OK. Clearly, prices for the goods sold by this company, and competitors like Mosaic (NYSE:MOS) and Agrium (NYSE:AGU), have run up unbelievably high. Is this just another tulip mania?

Tulips are nice and all, but the world doesn't need 'em. Food, which can only feed the 6.7 billion inhabitants of this earth with the help of fertilizers, is a little more fundamental. PotashCorp's CEO probably doesn't need to point this out to anyone, but here it is: "[T]he need for food is not abating."

On second thought, maybe he does need to point this out. People have concocted all kinds of ideas about the fragile state of the world today. It's important to remember that agricultural cycles can follow a rhythm all their own.

I'm watching corn and soybean futures plummet here, which does argue for diminished fertilizer demand in the months ahead, but the self-correcting mechanism is important to recognize. I've noted before that global food stocks -- and by that, I don't mean Kraft (NYSE:KFT) or Monsanto (NYSE:MON) -- sit around multidecade lows. Anything less than a bumper crop next year, and prices will march higher in a hurry, as shortages of staples like wheat and rice start to emerge.

I liked PotashCorp at twice today's price, so you'd better believe I like it down here.

Fool contributor Toby Shute doesn't have a position in any company mentioned. Kraft is an Income Investor selection. The Motley Fool has a disclosure policy.