We've heard about the unintended consequences of pursuing biofuels on food prices. Now, USA Today reports that increases in corn demand are pounding the Tequila industry.

Mexican growers of tequila's secret ingredient, blue agave, are switching over to crops like corn and beans in order to drink in the benefits of rising market price.

However, more lucrative crops aren't the only reason for the changes in crops. An agave plant takes 5-7 years to mature and a planting binge in the late 90's following a devastating freeze has resulted in a flood of agave today. As a result, the price of agave has dropped. In a few years, the choice of many farmers to grow corn could create a tequila squeeze.

It makes one wonder which other industries may be affected by the ethanol hangover. Overall, I think first gen biofuels are a good stepping stone, but if it somehow ends up affecting the bourbon market, I may have to rethink my position.

Source: USA Today

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