Trouble in Margaritaville: Farmers Growing Corn Instead

As Jeff noted, Germans are crying in their beer as farmers plant corn instead of barley; soon we won't be able to enjoy a Margarita without paying more either. Mexican farmers are burning their fields of blue agave, the main ingredient of tequila, to grow corn as US ethanol demand pushes up prices. Reuters says:

The switch to corn will contribute to an expected scarcity of agave in coming years, with officials predicting that farmers will plant between 25 percent and 35 percent less agave this year to turn the land over to corn. "Those growers are going after what pays best now," said Ismael Vicente Ramirez, head of agriculture at Mexico's Tequila Regulatory Council.

Despite rapid growth in tequila drinking, especially overseas, the over-supply of agave has driven prices for the plant to rock-bottom levels. Many growers have started to abandon the crop in favor of corn, whose price has rocketed in line with massive growth in U.S. demand for ethanol after President Bush outlined targets last year to use the corn-based fuel as a gasoline alternative. ::MSNBC and watch the video.

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