Hmm, Tequila ... or Fuel?

No more tequila? Say it isn't so! Seems that worldwide commodities prices have put a hurting on blue agave--the cactus like plant whose sap is fermented, then distilled, into Mexico's famous elixir. According to a report from Britain's Telegraph.co.uk newspaper website, Mexican farmers who grow blue agave are jumping ship. They have begun to burn their agave fields to clear the way for much more profitable corn.

The reason? Well, at least part of the shift in the profitability of corn has been linked to America's increased appetite for bioethanol fuel. According to the report, corn currently sells for 18 cents per pound. Just a few years ago, blue agave could fetch up to 80 cents per pound, but has recently dropped to less than 2 cents for the same amount.The causes of agave's price erosion have been linked mainly to widespread plant disease and foul weather that caused a severe shortage and then an ensuing heavy replanting and subsequent glut. The plant has an 8- to 12-year maturation cycle which has left many farmers leery of further investment when corn can be planted, harvested and sent to market within a few short months.

While we certainly can't blame Mexican farmers for abandoning the uncertainty of agave and wanting to make quick money on corn, we do wonder how it will affect the already tarnished reputation of ethanol as fuel. Growing corn for fuel has been consistently blamed for high food prices. But it's just not that simple ... this is a deep and complicated issue (involving many variables beyond the cost of corn grain) that we're not even going to touch in this brief blog. Our point is that corn is not the only feedstock (and almost certainly not the best) that can be used for ethanol production--it just happens to be one of very quick profit. Others include cellulosic biomass (such as switch grass and agricultural waste), which can be fermented or gasified. They are probably more sustainable and efficient in the long term, but the technologies need maturation time to become cost effective. What alarms us most is that the quest for short term profit undermines and deters proper and full development of better processes.

It's absolutely not all the fault of farmers. Commodities traders ... governmental policies ... weather patterns ... geopolitics ... supply and demand. They all play a part in determining what makes money and what doesn't, and maybe that's just the way it works. Things ebb and flow and eventually it all works out. We can only hope!