Gatekeeper asked in Social ScienceEconomics · 1 decade ago

If the use of ethanol becomes more pronounced...?

will the price of tortillas go up?

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  • NC
    Lv 7
    1 decade ago
    Favorite Answer

    Yes, but not as much as you would think. In the average food item on a supermarket shelf, farm inputs account for about 20% of the final price. The rest is storage, processing, transportation, and packaging. So, assuming tortillas are not very different from the average food item, doubling price of corn would raise the price of corn tortillas by about 20%. In reality, because of elasticity of demand and substitution, the rise should be less than that.

    The item that you should be watching out for is not food, but water. Widespread use of ethanol (and related increases in corn acreage) could put some serious pressure on water resources...

    As a side note, corn is not a very good crop to produce ethanol from. Ethanol produced from sugar cane is about 50% cheaper...

  • 1 decade ago

    Actually prices of tortillas already have drastically risen in Mexico because of ethanol.

    On a note, people need to realize that ethanol is NOT the end all energy solution, nor is it even a viable one. If we used all of the corn grown in the country if fuels somewhere between 9-15% of our cars annually.

  • Anonymous
    1 decade ago

    I'd worry more about my taxes going up to pay for that ethanol.

    Besides, you can ethanol from sugar cane, grass, wood chips and just about any organic matter, not just corn.

  • Anonymous
    1 decade ago

    The price of everything will go up no matter what. So you might as well help preserve the environment because we all have to live in it.

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  • Rabbit
    Lv 5
    1 decade ago

    That's what my politics teacher tells us.

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