At the risk of sounding drunk on the ethanol story, here is another unintended consequence of that boondoggle. The excellent Latin American editorial columnist Mary Anastasia O
This unlikely of scenarios requires a "perfect storm" of government intervention on both sides of the border. It hasn’t happened yet, but warning signs of the coming storm are visible. The first of these, the
Tortillas, made from corn, are a ubiquitous and tasty staple of Mexican cuisine. Spanish conquest, wars, revolutions, and socialist economic policies could not dislodge the tortilla from its central place in Mexican cooking. However, a perfect storm combination of artificially high corn prices caused by the
How could this happen?
However, Mexican corn farmers are free to export their corn if the global price is high enough. Guess where the big new demand for corn is pushing global corn prices to record levels? The new demand for corn is coming from the
Now, there can still be enough tortillas on the street corner, albeit at much higher prices, if the price mechanism is not interfered with. Tortilla prices will simply rise to reflect the higher prices of corn.
Note: Edited last paragraph for clarification and style on 1/30/06.