Ethanol demand will affect tequila supply

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The blue haze is acre after acre of agave fields stretching for miles near Tequila town.

The tequila industry has made a tremendous comeback from an insect infestation that threatened the agave crop several years ago. Now, a shifting economy is presenting as great a threat.

Mexican farmers are burning fields of blue agave, the plant used to make tequila, and resowing the land with corn to take advantage of a sudden demand for corn for United States ethanol plants.

"Those growers are going after what pays best now," said Ismael Vicente Ramirez, head of agriculture at Mexico's Tequila Regulatory Council. Officials there estimate a 25-35% drop in agave growing over the next few years.

Agave plants take 8 to 10 years to mature to usable size, so even a sudden reversion to agave won't avoid a shortage in the near-term.

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