With the increasing severity of weather anomalies, both production and post-production activities in the food supply chain are at stake. This paper examines the economic impact of the Mississippi River drought, an exemplar of extreme weather undermining agricultural production and logistics, employing a structural gravity model. Relying on the interstate commodity flow data, the domestic trade flows from 17 U.S. states adjacent to the Mississippi River system to the 16 U.S. states and 4 country groups during eight non-consecutive years (2007, 2012, 2017-2022) are analyzed. By factoring in the hydrological structure and flow of the river system, the economic costs of river drought reflect the decreasing crop production and increasing transportation costs. The findings show that low water levels in the Mississippi River drive up barge rates, with their effects being more pronounced at downstream. Counterfactual analysis reveals that, without river disruptions, domestic trade flow in the U.S. would have increased by $312.5 billion during the study period. Title: Tick size and price discovery: Futures-options evidence? Authors: Richie R. Ma and Teresa Serra Abstract: The tick size, representing the minimum price increment in a financial market, can influence pricing efficiency. We examine its role in price discovery between futures and options in the Chicago Mercantile Exchange corn and soybean markets. Futures markets have a tick size twice that of options, often resulting in one-tick quoted spreads. This limits traders’ ability to improve the best bid or offer price, reducing their capacity to incorporate information into the price. With less tick size constraint and despite thin and costly trading, we find that options are more informative than futures on average. Price-improving quotes from options traders enhance information impounded into prices, suggesting that an unconstrained tick size may enhance price discovery. Our study suggests that a “tight spread and deep depth” may not represent universally optimal market microstructure settings.
