What the heck do Mexican personal use drug laws have to do with the price of corn? That's their business. When Mexican organized crime bring drugs in this country and distribute them it's our business, but that's an entirely different topic.
As for the price of corn in this country being high, I would argue that it's still actually pretty darned low. Corn prices are up some now, mostly because of lower than expected yields last year caused by drought conditions and speculation about how much corn the ethanol industry will use, but in the grand scheme of things corn is still cheap in this country when you look at historical prices and factor in inflation. Corn prices had been staying around the same with minor fluctuations for a decade or more even though everything else has gotten more expensive, including the costs involved with growing the corn and getting it to market. What's happened is that American farmers have been perhaps too good at growing corn. They've overproduced and that has driven prices down. The government is in large part to blame for this because they've used subsidies to ensure that corn farmers make it even though they keep driving prices down. The government will set a target price for corn, a price they think farmers need to get to stay in business, and then when the market price is lower than the target price they'll pay subsidies on every bushel of corn produced to make up the difference between the target price and the actual market price. This encourages farmers to overproduce.
The price of corn going up is actually not such a bad thing. The higher the price of a bushel of corn, the less the government will pay in crop subsidies. Not only that, but farmers in other corn producing nations that complain about our subsidized corn flooding foreign markets will actually be in a lot better shape now because they will be able to get a fair price for their product. Then maybe, just maybe, we'll see less migrant workers form Mexico coming up here for work because their will be work for them at home.
posted on 01/10/2007 10:35:54 AM PST
Obviously, it means that formerly productive farmers are otherwise employed in the drug trade, which is more lucrative, even after a corn price increase.
posted on 01/10/2007 10:41:13 AM PST
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