CROP UNCERTAINTIES STIR INFLATION FEARS ON WALL ST.

Byline: Barnaby J. Feder The New York Times

As the nation's farmers head into their fields for spring planting, economists are paying more attention than usual to how the work is going.

Bad weather, dwindling stocks of grain and strong demand at home and abroad have sent corn and wheat to record high prices this month. And while the ultimate impact of the spike - on consumers and the broader economy - depends on such unknowns as the coming season's weather, the price instability has spawned anxious talk of inflation from the Farm Belt to Wall Street.

Already, many economists are saying it is likely that food inflation rates, which have hovered between 2 percent and 3 percent in recent years, will double by next year as the impact of current prices filters through the food pipeline.

Should that happen, the average family with children, which by government estimates spends approximately $6,500 a year on food, could end up spending $400 more next year.

Economists say a repeat of last year's experience - when planting was delayed, summer heat disrupted corn pollination and an early frost crimped yields - could drive those costs still higher, sending food inflation over 10 percent, a level last seen in the 1970s.

For now, the real impact is on agriculture itself. Many farmers are scrambling to cash in on the price increases by planting more acreage, while cattle producers are starting to kill off cows they no longer can afford to feed with expensive grain.

But what has economists and the financial markets edgy as they look ahead is that food prices are not the only ones going up this spring.

Heavy demand also has driven energy prices upward, to their highest level since the Gulf War.

Many bond traders, in particular, already have decided that broader inflation and higher interest rates are on the way, judging from how bond prices tumbled in recent weeks.

``Commodity prices are clearly spooking the bond market,'' said David Wyss, director of research at DRI/McGraw-Hill, an economic forecasting service in Lexington, Mass.

Most economists say that Wall Street has been overly anxious about inflation's return. Price shocks to the agricultural sector are certainly nothing new, and energy prices move in a volatile manner, both up and down.

``It is a temporary distortion as things stand now,'' said Diane Swonk, deputy chief economist at First Chicago NBD Corp.

Indeed, futures prices indicate the market is expecting some balance to be restored. While corn prices for delivery next month hit a high Thursday of $4.99 a bushel, traders are willing to bid only $3.35 a bushel for corn from next fall's harvest.

One reason for optimism: farmers are projected to plant 79.9 million acres of corn this year by the Agriculture Department and as much as 84 million acres by some private forecasters, up from 71 million acres last year.

But analysts say the risk is real that inflation could be uncorked, as much by market psychology as by supply and demand.