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Commodity prices regularly move together, despite the fact that causes of fluctuation can vary from commodity to commodity. Cross-market volatility could lower the effectiveness of diversification as a strategy for reducing price risks, so understanding the dynamics behind market interdependence and volatility transmission is critical.

BY: Joseph Glauber, IFPRI

The grains and oilseeds futures markets were down significantly following the release of USDA's August Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports.

This article is reposted with permission from farmdoc daily and is part of a farmdoc daily series on the 2014 farm bill and U.S. commitments on farm supports under the World Trade Organization (WTO). Costs and WTO notifications for crop insurance and some WTO terms used in this article (Aggregate Measurement of Support (AMS), Current Total AMS (CTAMS), de minimis thresholds, and green box) are discussed in farmdoc daily July 30, 2015 . Information on the 2008 Doha farm support proposals are from the WTO negotiating document .

Additional macroeconomic variables besides trade have a role in achieving food security objectives, and history shows that excluding them from the equation can lead to ineffective or counter-productive policymaking.

The following post by former International Food Policy Research Institute (IFPRI) senior researcher Alberto Valdés is part of an ongoing series of blog stories celebrating IFPRI’s 40th anniversary .