Last year, wheat was the world’s second only to rice as the most grown food. The number of wheat farmers worldwide increased by a whopping 34% in 2013, and wheat was the world’s second most consumed crop.
This is good news for small farmers who can use the increased availability of cheap energy to improve their crops and sell some of the surplus at a profit. But it’s bad news for the global wheat market, which has been hit hard by the dramatic price collapse in the last two years.
The price of wheat has plummeted over the last two years, after two consecutive years of price increases, as new technologies make it more expensive to produce the grain. That’s meant the price of wheat has fallen by as much as 80 percent since its highest in 2011.
The latest drop in global supply is not expected to last for long: the United Nations predicts wheat should return to its 2008 levels in the next seven to 10 years. But as demand for wheat from China and India continues to dwindle, it will require a drastic increase in imports to keep up.
China and India are the largest producers of wheat in the world. They consume a third of the world’s corn crop. The United Nations predicts that countries like India will have to increase wheat imports by 40 percent by 2025 to meet their growing demand in the global economy. But it also predicts that China will be the biggest contributor to world food security, with an increase in China’s annual corn harvest of more than half a billion bushels by 2030.
If you ask me, it looks like China has had the best of it and the worst of it. Their farming practices may be atrocious, but that doesn’t mean they’re doing well. Many of the world’s largest corn-producing counties have been ravaged by drought, famine, and hunger. So is this a good thing? No, and that’s why it’s so important for American wheat farmers to be able to sell their wheat to Chinese buyers.
The reason why its important is because China is the world’s largest wheat user, and they are in desperate need for wheat. Wheat accounts for about 50 percent of the top ten wheat producing countries in the world. Chinese wheat farms will need to expand to meet this demand, and they will need to expand quickly. Most of the world’s wheat is grown in the US, and there are only a few thousand Chinese wheat farms.
The Chinese farmers will be the ones who will pay the price for this change. The US government has plans to increase the importation of US wheat to China by 40 percent over the next five years. So that means that wheat farmers in the US will need to expand.
The wheat in the US is grown on farms that often are in some of the poorest communities on earth. The demand for wheat there is low (in terms of quantity) and the farmers there can’t afford to expand. That means that wheat farmers in the states will need to expand. So this is going to raise the price of wheat and it will affect other countries as well.
Wheat is the number one staple food in China, but it is not the most popular grain there. That’s because China’s wheat production is largely concentrated in a few large cities that are growing wheat on a relatively small scale. These cities are located in a big triangle that starts at Beijing in the southwest, extends north to the Yangtze River, and ends up in the northeast at the Yellow River delta.