Tony Turkovich's alfalfa crop in Winters is turning a good profit right now, while the Sacramento region's dairy industry struggles to make ends meet. What does that have to do with the price of wheat in Egypt? Or the price of corn in Iowa?

Turns out, California agriculture is intertwined with global and domestic markets in all sorts of ways, and while rising commodity prices worldwide have caused alarm in foreign markets and pinched recession-weary Americans, most California farmers are making hay while the sun shines.

Agriculture has been praised by both the White House and Congress as a pinpoint of light in the dismal economy, with farm exports booming. That's mostly good news for California's farm industry. The state's nut, citrus, alfalfa and other crops are big business, generating $34 billion a year from more than 25 million acres of farmland.

Some California crops, including rice, processing tomatoes and nuts, are finding success in brisk global markets, spurred by improved economies and diets and a shift from staple grains to more protein-rich food. Other crops are enjoying indirect boosts from worldwide commodity pricing patterns, while some, most notably the state's dairies, are getting creamed in the changing marketplace.

The trends are bound to be influenced by fuel prices, tension in the Middle East, ethanol subsidies, the state's ample snowpack and a commodities market that showed signs in the past week that prices may have peaked.

Growers' decisions likewise affect feed and equipment markets and what's on sale at the supermarket.

"There's a lot at play right now," said Turkovich, who grows alfalfa, wheat, tomatoes and prunes on his Yolo County ranch. He explained that he's getting more for his wheat, because of worldwide demand.

Dave Kranz, communications director for the California Farm Bureau Federation, said international markets are clamoring for wheat, fueling prices and resulting in more acres being planted in California. The state's winter wheat acreage went up 15 percent this year, compared to 2010, while durum wheat, used to make pasta, has 35 percent more acreage, mainly in the southern part of the state.

Meanwhile, growers are looking to take advantage of higher demand and prices for cotton, Kranz said. Increased cotton acreage in Southern California is replacing alfalfa plantings, which are down about 5 percent, squeezing supply and driving up the price of Turkovich's alfalfa.

Corny Gallagher, agribusiness executive in global commercial banking at Bank of America Merrill Lynch in Sacramento, said cotton prices are hovering at an all-time high.

Over the past 15 years, California cotton acreage plummeted, from more than 1 million acres to less than 400,000, because of water supply restrictions and ground being moved to almonds, pistachios and alfalfa. Now the Central Valley Project and the State Water Project are boosting water allocations to farmers, encouraging growers to plant cotton.

"When cotton goes to $2 a pound, farmers will take whatever land and water they have, and move from alfalfa to cotton," Gallagher said. "Cotton is expensive to grow and requires lots of water, which farmers couldn't afford when it was less than $1 a pound."

While Turkovich nets more for his alfalfa hay, the state's livestock, milk and egg producers groan under the pressure of spiraling feed prices. Higher costs have contributed to a string of bankruptcy filings among California dairy operators in the past three years, said Michael Marsh, chief executive officer of Western United Dairymen in Modesto.

Marsh said milk prices have come up since the lows of 2008, and increased demand for protein-based products have widened export markets. But dairy operators can't keep up with feed prices, which are being pushed up by rising fuel costs and the ethanol program.

"Commodity costs eclipsed any milk price increase they received in 2011," Marsh said of dairymen. He said feed prices to produce 100 pounds of milk jumped from $6.59 in 2005 to $9.82 in 2008. The cost of feed softened slightly in 2009 to $8.77, the last year for which statistics are available from state agriculture officials. However, Marsh said feed costs have "increased substantially" from 2009 to 2011.

Because of the profit margin compression, 250 California dairies have shut down since 2008, more than one-eighth of the state's dairies.

Gallagher said food commodity markets heated up as investors gambled on uprisings in the Middle East and population growth to push fuel and food prices higher.

Prices have soared so quickly that a massive sell-off started last week, as investors became concerned that prices of oil and food commodities are at unrealistic levels. Only time will tell if it was the beginning of a long-term price decline or just a temporary adjustment.

Daniel Sumner, an agriculture economist at the University of California, Davis, said the federal subsidy program for growing corn for ethanol created a demand for corn, especially in the Midwest states, and a race for land and markets among U.S. growers.

"When corn is planted, it takes away from some other grain being planted, such as alfalfa, wheat, cotton or soybeans, which increases prices," Sumner said. "The price goes zooming up for those crops because there's no inventory."

Gallagher said that about 25 to 30 percent of the country's corn crop goes to ethanol production, a touchy issue for California dairy operators, and egg and poultry producers, whose costs for corn-based feed are rising.

Internationally, changing diets are hitting close to home, as incomes escalate in developing countries, such as China and India. Families are better fed and moving from dependency on staple grains to more animal and nut proteins, Sumner said.

The U.S. Department of Agriculture forecast agricultural exports to reach a record $126.5 billion in fiscal 2011, an increase of $17.8 billion over 2010.

In the past century, worldwide commodity prices have typically gone down as farmers figured out ways to produce crops for less.

"Now there's concern that farmers won't be able to keep up with population growth," Sumner said. "There's less money spent on research and development and more on environmental standards. This is putting upward pressure on commodity prices over time."

With more than 300 commodities being grown in California, it's difficult to make generalized analyses of prices and their effects, said Gallagher. But he said the driving force in global food demand is the forecast of 9 billion hungry mouths by 2050.

"The good news is, the U.S. economy is developing, and expected to grow by 3.5 percent," Gallagher said. "China and other developing countries are expected to grow twice that. As economies improve, people turn to nut and milk proteins."

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