Wheat

Wheat is an item obtained by farming or found in dungeon chests. Seeds for growing wheat are obtained by breaking tall grass. Wheat can be crafted into bread, and is a necessary ingredient for cake and cookies.

Wheat may be used to breed cows, sheep, and Mooshrooms via first herding two of them together and then right clicking them with the wheat to begin "Love Mode." Wheat can also be used to lower a horse's temper when attempting to tame it.

Farming
Wheat can be farmed and harvested on farmland. When farmed, it will take 8 stages to grow, each stage being a little taller and darker than the previous one. When fully grown, wheat crops will drop 1 wheat as well as 0-3 seeds. If harvested before fully grown, it will only yield seeds. Right-clicking on wheat crops with Bone Meal will advance them to further stages in the growing process. Wheat may be planted in The Nether, but it will grow at a slow pace since water can not be placed to hydrate the farmland.

Efficiency comparison
Wheat is used to make several different types of food, but the benefit you get from each unit of Wheat varies widely depending on what you use it for. This chart compares the number of hunger points you can expect to regain for each unit of Wheat you use, depending on how you use it.

Based on these statistics, the most effective use of Wheat is to breed Mooshrooms. They give the greatest return in terms of refilling your hunger meter, (more than cows because you can milk them with bowls to get mushroom stew), and also give you Leather, which you need to make books, and therefore bookshelves, so it helps you make better enchanted items. The above numbers actually understate the advantage of cows, as steak also gives far more saturation than the other foods listed.

Video
(Note: the narrator demonstrates at 0:56 that walking over wheat can destroy the crop and untill the land. In update version 1.1 and onward, this is not the case and wheat can only be destroyed by a player jumping on it.)

Trivia

 * Crops can be harvested quickly and easily from large farms in a very short period of time either by redirecting water over the crops, using redstone lights to light the room and then turning them off, or by using pistons. Immature crops always drop one seed, but fully grown one can drop up to 3 seeds. It has about a 90% chance of dropping at least one seed, and 15% chance of dropping three seeds.
 * Wheat doesn't appear in the statistics page.
 * Dungeon chests can contain wheat in stacks of 1-4.
 * 2-3 Bone meal can be used to mature a newly planted wheat seed.
 * As of 1.5, wheat's growth is no longer considered a block update, ruling out the possibility of automatic wheat farms utilizing BUD switches.
 * In a Snow/Taiga Biomes, if you put torches around a wheat farm, the water won't freeze as easily.
 * Using Wheat to breed animals and eating their drops restores your hunger meter more than making the same amount of wheat into Bread and eating it.
 * Holding wheat in your hand causes cows, sheep and mooshrooms that are close by to follow you, until you stop holding the wheat.
 * Pigs and Chickens don't use Wheat to breed, instead, chickens breed with seeds, and pigs use Carrots.

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