Resource Crunch: Why Many Things Cost Much More

By Tom Randall and Eric Roston - 2012-02-06T18:24:40Z

Photograph by Per-Anders Pettersson/GalleryStock

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Peak Food--The Earth Can Manage It. Can We?

The price of wheat, the most-consumed food grain, has almost quadrupled in four decades as global demand surged for everything from bread and cakes to cookies and pasta.

With brief exceptions, wheat averaged about $3 a bushel from 1960 until 2008. That year, weather damage and plunging inventories quadrupled prices. At the same time, the price of rice contributed to more than 60 food-related riots worldwide.

After the recession, wheat still trades at about $6.50 a bushel, encouraging farmers to grow the biggest crop ever. Rice trades at almost double its pre-2008 price. If managed right, grain production may have no peak, though volatility and higher prices are becoming the norm. Cargill, the farm commodities trader, has said the era of falling food prices has probably come to an end.

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