The Associated Press reports that tortilla prices in Mexico jumped nearly 14 percent over the past year. The Mexican government and economists say that increased US production of ethanol from corn contributes to the problem.
So, here in the US our government is encouraging the production of ethanol as an alternative to gasoline, which uses corn that otherwise might be used to produce tortillas, which drives up the cost of tortillas in Mexico, which potentially causes a lot more Mexicans to come to the US so they can make enough money to buy tortillas. Central planning never works as intended; the variables are too numerous and too complex for mere humans to comprehend.
You might ask, why isn’t corn production in the US increasing to meet the additional demand? I don’t know; I’m a mere human. But I suspect it’s because of government manipulation of agriculture. We support the price of some commodities. We limit the production of other commodities. Governments need to get out of the way and let a free market handle these supply and demand problems.
The biggest question in my mind is, why can’t Mexico produce enough corn to supply all the tortillas they need at a reasonable price? The answer is probably the same as the above: government manipulation.