Food for thought here on potential diminishing returns.
Consider for example, upgrading your wood pastures.
To take one field from lvl 0 to level 1 requires:
40 lumber, 100 brick, 50 iron, 60 wheat, 2 wheat/hr upkeep.
To take one field from lvl 1 to level 2 requires:
65 lumber, 165 brick, 85 iron, 100 wheat, 1 wheat/hr upkeep.
That is quite nearly a 5/3 increase in cost (save for wheat upkeeps).
Lets compare the benefits:
A lvl 0 field produces 2/hr
A lvl 1 field produces 5/hr
A lvl 2 field produces 9/hr
So in upgrading from 0->1 we net an additional 3/hr, while upgrading from 1->2 we gain 4/hr.
That is exactly a 4/3 increase in production.
Now barring the wheat upkeep this would be a classic diminishing returns scenario, where one would clearly buy all the lower level upgrades before acquiring any higher level ones. However, the upkeep
is an important mitigating factor to consider, because in upgrading our fields to lvl one we now pay 2 additional wheat/hr, whereas upgrading to lvl two we only pay 1 additional wheat/hr. (Someone correct me if I'm wrong, I'm assuming this is cumulative. That is a lvl 2 shop burns 2 wheat for lvl1-ness, and an additional 1 wheat for lvl2-ness, for a
total of 3 wheat/hr.)
Here we see that buying level twos is beneficial compared to level ones, and pretty dramatically at 50% wheat cost.
Taking a look, however at typical materials requirements though, consider the following building costs:
Warehouse: 130 lumber, 160, bricks, 90 iron, 40 wheat, 1 wheat/hr
Granary: 80 lumber, 100 bricks, 70 iron, 20 wheat, 1 wheat/hr
Embassy: 180 lumber, 130 bricks, 150 iron, 80 wheat, 3 wheat/hr
Cranny: 40 lumber, 50 bricks, 30 iron, 10 wheat, 0 wheat/hr
Lumber and brick are clearly the highest demand, followed by iron, with wheat in dead last. So bulk wheat is not particularly vital. In fact it would appear that if your net wheat production is even one third as much as your powerhouse resource production you won't be left wanting to produce something but come up short on wheat. Indeed, from the bit of game I've seen (note this is completely neglecting anything unit-based), it seems if you have enough wheat to pay your upkeeps, with perhaps a small surplus, you'll probably be in the clear.
This has led me to continue advocating my policy of broadly upgrading the lower-levels first, while maintaining a respectable wheat income. This means, granted, my wheat fields will be leveling up faster and my
gross wheat production will outstrip my other minerals, but it seems the most logical course, from what I've seen. However, if at some point it becomes unfeasible to continue upgrading my wheat fields (far too expensive, compared to the alternative of prematurely upgrading a different resource tile), that also is something I haven't yet taken into consideration.
If you have ideas of your own, or reasons/unconsidered evidence/further game progress/etc. to the contrary, I'd be more than happy to listen, though.