Oil, Tortillas and Green
Copyright Jack Mixner. 714 449 1040. www.mixnerstrategy.com
The price of oil is falling. Certain sectors of the oil market require high oil prices to remain profitable. Low prices will send some companies, like low efficiency ethanol-from-corn producers, reeling (Zuckerman).
Green laws are requiring the ethanol content of gas to rise, raising the price of corn the feed stock for ethanol production.
High prices for corn raise the price of tortillas, a food staple in Mexico (Barclay). The government is importing corn to drive down corn prices.
This is a new, disorganized, and inefficient market. Politics are effecting the price of oil and corn. Relying on either of them for long term growth and profitability will require knowledge, efficiency - and luck.
References
Barclay, Eliza. Tortilla Trouble in Mexico. BusinessWeek. 29 January 2007. 10.
Zuckerman, Gregory and Ann Davis. Who is Hurt by Oil's Fall? Wall Street Journal. 19 January 2007. C1.