The days are ticking down to another New Year, now just a few days off. As we get set to close the books on 2010, we look forward to the promises and the possibilities 2011 holds. We look forward to preparing for new opportunities, new business, new friends and new hope.

To be prepared for 2011 we also must factor in the probability of higher prices. Food, clothing, oil, utilities and gas are thought by many to be headed higher in the New Year. Oh, and don’t forget corn as well as other agricultural commodities. Rising prices will be a sure thing in 2011 and the agriculture complex will not be left out.

As the Hollywood icon Bette Davis said in the 1950 classic “All About Eve”, “Fasten your seatbelts, it’s going to be a bumpy night.” If the late actress were alive today, she might say that about the upcoming year. Volatility will certainly add awe to the price increases.

International financial services provider Rabobank last week said that they believe corn will average $6.00 per bushel in the first quarter of 2011 and slightly less in the second quarter. Rabobank expects heightened price volatility ahead, “making the road to higher prices a bumpy one,” says the report.

Others predict that corn will take out the record of $7.60 per bushel set in June 2008. Singapore-based trading specialist Phillip Futures has placed a 2011 target of $8.50 a bushel on Chicago corn futures.

Ethanol will continue to be a significant factor in sustaining strong corn prices. “We expect USDA to boost the corn for ethanol estimate next month now that the ethanol tax credit has been extended through 2011,” according to Doane Agricultural Services. Low corn inventories this year also increase the need for additional corn acres next year. Meanwhile, soybeans and cotton will also be competing aggressively for their share of acreage.

Prices also are predicted to rise sharply in 2011 for energy, with many eying $100 to $125 per barrel for oil. “Commodity prices will continue to rise until there's a reason for them to fall,” says Todd Horwitz, chief strategist at Adam Mesh Trading Group.

In the grains complex, corn will remain ensconced in the driver’s seat because of a tight inventory situation, ethanol mandates and the recently-extended tax credits. As corn rises, other commodities such as soybeans will rise as well. Fertilizer also is expected to march higher.

For corn prices to ease there needs to be a willingness to ration or reduce consumption among the dominant users including ethanol, export and the poultry and livestock industries. “Somebody needs to cry ‘Uncle!’ in this corn consumption dynamic and I don’t see who that is right now,” says Joe Kerns, International Agribusiness Group, Ames, Iowa.

The La Niña weather pattern also will do its part in spurring prices higher. “With robust demand growth from emerging market economies – particularly China – agricultural prices are likely to be extremely sensitive to any further weather or policy‐induced supply shocks,” says the Rabobank report.

Prepare your strategy now to soften the blow of higher prices on the way. Risk management strategies may be your most important financial seatbelt for the upcoming year.  They will play a crucial role in protecting your bottom line in 2011.