Mexico feeling effects of ethanol boom

U.S. demand for corn pushes prices up for farmers, shoppers

SAN SALVADOR EL SECO, Mexico – High corn prices are wreaking havoc on Mexico’s inflation rate and forcing shoppers to pay more for eggs, milk and tortillas. But they’re a godsend to farmers such as Victor Manuel Amador Luna.

With world corn prices riding high on strong demand from U.S. ethanol producers, Amador is looking to expand production on his farm about 125 miles east of Mexico City in the state of Puebla. He planted most of his 222 acres with corn this year and is looking to buy more land.

“I’ve never seen prices this high in my lifetime,” said Amador, 79, his smile wide, like the crack in the dusty windshield of his Chevy pickup.

How long the bonanza will last is anyone’s guess. What’s clear is that America’s thirst for corn-based ethanol is being felt around the globe, delivering fatter profits for grain farmers but higher costs for livestock producers, food processors and consumers.

Los Angeles Times