MEXICAN FARMERS ABANDON AGAVE FOR CORN

An oversupply of agave plants and a rise in U.S. ethanol demands are leading many Mexican farmers to burn their agave fields in favor of corn, according to Reutuers. The switch to corn will eventually lead to an agave scarcity and therefore a tequila shortage in the coming years. Officials are predicting that farmers will plants between 25% and 35% less agave this year. Disease has also taken its toll and many in the industry believe that by 2008 much of the crop will be sick.

While tequila has grown, the oversupply of agave has driven prices way down. But after President Bush announced plans to use corn-based fuel as a gasoline alternative, prices went up and Mexican farmers jumped on board. The ever growing demand for ethanol led farmers in the U.S. to plant 15% more acres of corn this year from 2006, but anticipated bad weather will likely mean less corn and higher prices.