The purpose of this paper is to examine the effect of weather on the distribution of yield and its subsequent impact, along with price, on the acreage allocation decisions of crop farmers in Ontario. Area response functions are estimated for corn, soybeans and winter wheat for eight counties in Ontario over a 26-year period. The paper begins by presenting a stochastic production function of crop yield that allows for the effects of climatic variables on the mean and variance of crop yield. This yield distribution information along with the mean and variance of prices are then used to develop an
empirical model of area allocation between crops. The data on climatic variables, crop area, yield, and prices are then discussed, followed by a presentation of the results for the yield and crop area response functions. The results indicate that both expected price and yield are important in the decision with respect to area planted, which differs from previous research that focused almost exclusively on the effect of prices and its impact on crop profitability.