Peak wheat - AbsoluteAstronomy.com

Peak wheat is the concept that agricultural

Agriculture

Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...

production, due to its high use of water and energy inputs, is subject to the same profile as oil

Peak oil

Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. This concept is based on the observed production rates of individual oil wells, projected reserves and the combined production rate of a field...

and gas production. The central tenet being that a point is reached, the "peak", beyond which agricultural production plateaus and does not grow any further. In fact production may even go into permanent decline.

Based on current supply and demand

Supply and demand

Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers , resulting in an...

factors for agricultural commodities (e.g. changing diets in the emerging economies, biofuels, declining acreage under irrigation, growing global population

World population

The world population is the total number of living humans on the planet Earth. As of today, it is estimated to be billion by the United States Census Bureau...

, stagnant farm productivity growth), some commentators are predicting a long-term annual production shortfall of around 2% which based on the highly inelastic demand curve for food crops could lead to sustained price increases in excess of 10% a year - sufficient to double crop prices in 7 years.

According to the World Resources Institute

World Resources Institute

The World Resources Institute is an environmental think tank founded in 1982 based in Washington, D.C. in the United States.WRI is an independent, non-partisan and nonprofit organization with a staff of more than 100 scientists, economists, policy experts, business analysts, statistical analysts,...

, global per capita food production has been increasing substantially for the past several decades.

China

Water is a necessary input

Intermediate good

Intermediate goods or producer goods are goods used as inputs in the production of other goods, such as partly finished goods. Also, they are goods used in production of final goods. A firm may make then use intermediate goods, or make then sell, or buy then use them...

for food production. Two billion people face acute water shortage this century as Himalayan glaciers melt. Water shortages in China have helped lower the wheat harvest from its peak of 123 million tons in 1997 to below 100 million tons in recent years. Of China's 617 cities, 300 are facing water shortages. In many, these shortfalls can be filled only by diverting water from agriculture. Farmers cannot compete economically with industry for water in China. China is developing a grain deficit even with the over-pumping of its aquifers. Grain production in China peaked in 1998 with 392 million tons, but it fell below 350 million tons in 2000, 2001, and 2002 and has been falling since. The annual deficits have been filled by drawing down the country's extensive grain reserves and now has been forced to turn to depend on the world grain market. Some predict that China will soon become the World's largest importer of grain.

Japan, Korea and Taiwan

In Japan

Japan

Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...

, Korea

Korea

Korea ) is an East Asian geographic region that is currently divided into two separate sovereign states — North Korea and South Korea. Located on the Korean Peninsula, Korea is bordered by the People's Republic of China to the northwest, Russia to the northeast, and is separated from Japan to the...

and Taiwan

Taiwan

Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...

, agricultural output plummeted as industrial output rose - a combination of the loss of arable land

Arable land

In geography and agriculture, arable land is land that can be used for growing crops. It includes all land under temporary crops , temporary meadows for mowing or pasture, land under market and kitchen gardens and land temporarily fallow...

and competing claims by industrial processes on water for irrigation

Irrigation

Irrigation may be defined as the science of artificial application of water to the land or soil. It is used to assist in the growing of agricultural crops, maintenance of landscapes, and revegetation of disturbed soils in dry areas and during periods of inadequate rainfall...

Russia, Ukraine and Kazakhstan

Russia, Ukraine and Kazakhstan are ensuring that their own markets have wheat. To do this they have restricted exports and levied tariffs on wheat. Higher prices are not meeting any opposition from desperate buyers.

China

Japan, Korea and Taiwan

Russia, Ukraine and Kazakhstan

See also