Are futures prices exogenous to agricultural supply? It depends. We argue that crop yield shocks were predictable during the 1961-2007 period because high planting-time futures prices tended to indicate that yield would be below trend. This feature of the data implies that regressions of...

High corn prices cause farmers to plant more corn on fields that were planted to corn in the previous year, rather than alternating between corn and soybeans. Cultivating corn after corn requires greater nitrogen fertilizer and some of this nitrogen flows into waterways and causes environmental...