Precio del Maíz Pactado en Enero 07 /1 = $3,500 la tonelada Tortilla “ Cruda Realidad” Precio del Maíz en Junio 06 = $1,800 $1,700 por tonelada Precio de la Tortilla Pactado en Enero 07 = $8.5 por kilo Precio de la Tortilla en Junio 06 = $6.0 $2.5 por kg 1 Kg. de Maíz 1.2 Kg. de Harina 2.0 Kg. de Tortilla 1 Kg. de Maíz 2.4 Kg. de Tortilla /1 Cribado y encostalado en el DF Impacto en el Costo de la Tortilla 1.70 2.40 = = 0.71 / Kg . Diferencia Diferencia

What did big Ag knew? Did the government knew about how the grain market works? Surprisingly enough, no. Tortilla is a staple food in Mexican society. The average Mexican household consumes about 1 kg (2 lb) of tortilla daily. 50% of Mexico is below the poverty line, which means that their minimum wage is about $50 pesos per day (US$4.5). In the beginning of 2006, several tortilla stores around the country increased their prices to almost 150%, claiming that the rise in price of "corn" was the cause for the increase. In April of 2006, President Calderon accepted an offer from Big agrifood (Maseca, Cargill, etc) companies to settle the price of tortilla to $8.5 per kilo. From last year at $6.0, that is still almost a 30% increase.

Tortilla is a staple food in Mexican society. The average Mexican household consumes about 1 kg (2 lb) of tortilla daily.

50% of Mexico is below the poverty line, which means that their minimum wage is about $50 pesos per day (US$4.5).

In the beginning of 2006, several tortilla stores around the country increased their prices to almost 150%, claiming that the rise in price of "corn" was the cause for the increase. In April of 2006, President Calderon accepted an offer from Big agrifood (Maseca, Cargill, etc) companies to settle the price of tortilla to $8.5 per kilo. From last year at $6.0, that is still almost a 30% increase.

There are two different methods to make tortillas…For starters, 1 Kg of corn is not 1 Kg of tortilla If the tortillas are derived from flour.. *1 kg of Corn does not translate to 1Kg of Tortilla, but to 1.2 Kg of corn flour after calcium is added. Once baked into tortilla, 1 Kg of corn transforms into 2 Kg of tortilla because water is added; therefore, increasing weight. If the tortillas are derived from corn (or nixtamal)... *1 kg of corn becomes 2.4 Kg of tortilla after calcium, water is added, and in difference to corn flour, is not refined and retains most of its fiber.

If the tortillas are derived from flour..

*1 kg of Corn does not translate to 1Kg of Tortilla, but to 1.2 Kg of corn flour after calcium is added. Once baked into tortilla, 1 Kg of corn transforms into 2 Kg of tortilla because water is added; therefore, increasing weight.

If the tortillas are derived from corn (or nixtamal)...

*1 kg of corn becomes 2.4 Kg of tortilla after calcium, water is added, and in difference to corn flour, is not refined and retains most of its fiber.

There are two different methods to make tortillas…For starters, 1 Kg of corn is not 1 Kg of tortilla Therefore, if the price of corn from July 06' was only $1.8 per kg, and the price of corn in January 07' was $3.5 per kg, then the difference is an increase of $1.7 per kg and if we divide this by $2.4 (considering that we take out $0.10 because of the increase in natural gas). The impact of the increase in the price of 1 kg corn should had only been $0.71 kg of tortilla not $2.5 kg. Big Ag understood the market and gave President a “solution” to this problem. Sadly, this is home economics every housewife in Mexico that bakes tortillas or buys them understand these figures perfectly.

Therefore, if the price of corn from July 06' was only $1.8 per kg, and the price of corn in January 07' was $3.5 per kg, then the difference is an increase of $1.7 per kg and if we divide this by $2.4 (considering that we take out $0.10 because of the increase in natural gas). The impact of the increase in the price of 1 kg corn should had only been $0.71 kg of tortilla not $2.5 kg.

Big Ag understood the market and gave President a “solution” to this problem. Sadly, this is home economics every housewife in Mexico that bakes tortillas or buys them understand these figures perfectly.