NCGA White Paper on Mexican Corn Prices Looks at Market Issues at Play (3-21-07)
Numerous media reports in recent months suggest higher yellow corn prices and increased ethanol production in the United States are driving tortilla prices higher in Mexico. A white paper by the National Corn Growers Association takes a broad view of the situation and looks at some of the market nuances at play.
The paper notes demand for ethanol production along with the rising price of yellow corn has had some influence on white corn prices in Mexico, however, tight white corn supplies in Mexico due to a 2006 drought is a more significant price driver. Reduced production decreased Mexican stocks, resulting in higher corn prices for tortilla producers.
KEY ISSUES
