Mexico pushes for self sufficiency in corn

Mexico is pushing for self-sufficiency in corn production, based on a DJ report filed over the weekend. High corn prices are at the root of the effort.

Click here for the Dow Jones report.

Whether the government there can pull it off is an open question. Can it efficiently bring together enough land, water, technology and inputs?

Mexico still has a flow of oil money, though not like it did a decade ago. Vast amounts of capital have been blown on impressive highways and government buildings. So, plowing money into making the country self sufficient in a staple grain doesn't sound like an illogical investment to Mexican politicians - especially considering how angry the population and labor unions were earlier this year when the price of tortillas doubled in places.

Making itself self sufficient in corn runs parallel to this country trying to make itself at least a little less dependent on foreign oil.

Other questions:

• What will be rotated with the corn? Cotton, beans (edible, soy), grain sorghum? And how will that effect Mexico's position as a U.S. buyer of our commodities?
• What effect will this have on demographics? If the country pushes for land consolidation to enlarge farm size and scales of efficiency, would that lead to more displaced peasants moving into the cities - above and below the border?
  
• Are we seeing a repeat of the late 1970s when the U.S. imposed a grain embargo on the Soviet Union, with the subsequent expansion of grain production in South America? It could be argued that South American countries would have expanded grain acreage, anyway, but the embargo probably pushed expansion harder and faster. There's no embargo, but a good deal of U.S. grain will not be available for export, just the same.