As California votes on labeling genetically engineered food, the implications are huge for Minnesota's food industry.
A campaign sign for Proposition 37, which would require foods that contain genetically modified organisms to be labeled, on Cate Leger's lawn in Berkeley, Calif., Sept. 12, 2012. On Nov. 6, Californians will vote on whether to require that genetically modified organisms in food be clearly identified as such, and organic food companies are split on the bill.
On Election Day, Minnesota's giant food industry -- from General Mills and Cargill to family farmers -- will be watching a California referendum as closely as the presidential race. So will consumers wary of food derived from genetically engineered ingredients.
Californians will vote on Proposition 37, which would force food manufacturers to label products containing genetically engineered ingredients for the first time in the United States. The effect would be sweeping.
The majority of packaged food in U.S. supermarkets is derived from genetically engineered (GE) crops, from corn to canola. California is a huge market, and consumer laws that originate there tend to spread. Meanwhile, Minnesota is a food industry hub and a bastion for GE crops, which cut farmers' costs.
The food industry says labeling would be costly, and that GE technology is supported by ample science and the blessing of regulators and health authorities. A label denoting GE ingredients would needlessly scare consumers, they say.
"It sort of implies the product is bad for you when there is no basis for that," said Reid MacDonald, CEO of Faribault Foods, a Minnesota bean and vegetable canner. "What people see is a sort of skull and crossbones."
But Proposition 37's proponents counter that the measure, which would take effect in 2014, is necessary because the long-term health implications of GE crops are unknown. Consumers have a right to know now if GE ingredients are in their food.
The United States has taken a "trust-the-companies" approach to GE-derived food, said Michael Hansen, senior scientist at Consumers Union, a Proposition 37 backer. Labels are needed "so consumers can make a decision on whether they want to be guinea pigs in this experiment."
Agribusiness and food firms have been pouring money into defeating Proposition 37. As of Oct. 24, their tally stood at $41.1 million, says MapLight, a nonpartisan research group.
GE crop kingpin Monsanto was the biggest overall donor at $7.1 million, while General Mills was the largest Minnesota-based contributor at nearly $1.1 million. Hormel Foods, Cargill, Faribault Foods and Arden Hills-based Land O'Lakes have contributed, too.
Meanwhile, Proposition 37's supporters have raised just over $7 million. A top donor has been an arm of the Finland, Minn.-based Organic Consumers Association. It's ponied up about $1 million, according to the California state records and Yes on 37, the group pushing Proposition 37.
That cash has come mostly from $50 to $100 donations from the group's members, said Ronnie Cummins, head of the Organic Consumers Association. "This is by far the most we've ever raised, and it shows how strongly consumers feel about this issue."
Cummins' forces have an edge in public opinion, but it's shrinking as labeling opponents mount a TV advertising blitz. A USC Dornsife/Los Angeles Times poll released Thursday shows 44 percent of Californians backing Proposition 37 and 42 percent opposing it. That margin was 61 percent to 25 percent on Sept. 17.
GE crops have been part of the nation's food supply since the 1990s. Nowadays, GE seed accounts for almost 90 percent of the corn planted in the United States, and more than 90 percent of soybeans and sugar beets. Minnesota is a big corn and soybean producer, and it's the nation's top source of sugar beets.
GE crops require fewer pesticide and herbicide applications, leading to fuel and labor savings for farmers. "Farmers wouldn't use [the technology] if it didn't save them time and money," said Doug Peterson, president of the Minnesota Farmers Union.
At least 70 percent of the items on U.S. supermarket shelves are derived from GE crops, particularly corn. From syrup to oil, "corn gets broken down into so many different ingredients -- it gets into everything," said Ted Labuza, food science professor at the University of Minnesota.
The California labeling mandate, if it passes and survives almost certain court challenges, would produce several quandaries for the food industry.
Tailoring labels for one state is economically inefficient; foodmakers rely on uniform national packaging. Then, there's the chill on demand that could occur if the food industry is correct in contending that GE labels are meant to rattle consumers.
Cummins, of the Organic Consumers Association, is essentially counting on such an effect.
"We believe that just like in Europe [where GE-derived foods are not popular], consumers will complain to stores, stores will complain to suppliers and suppliers will go back to farmers. If this passes, it will dramatically reduce the [U.S.] market share of GE foods and ingredients."
GE labeling also is likely to add to food producers' costs -- which ultimately could mean higher costs to consumers -- though how much more is debatable. For instance, the industry says the measure could spark a slew of litigation over mislabeling, raising costs. But labeling supporters say such concerns are overblown.
For industry, the alternative to labeling is to return to ingredients derived from non-GE crops. That's what food industry stock analyst Alexia Howard of Bernstein Research believes many companies will do for the California market -- even though it will cost them more.
Historically, non-GE corn and soybeans cost 70 cents to $2 per bushel more than their GE counterparts, Howard wrote in a recent report. That price premium could rise in the short term if California mandates labeling, as producers scramble for the scarce supply of non-GE grains.
Non-GE grains cost more mainly because their identity must be preserved through a separate supply chain, Howard wrote. They must be rigorously separated from GE crops.
If a foodmaker wants to be "clean" for GE crops, it must essentially take the same approach as it would for organic food production, said Faribault Foods' MacDonald. Faribault, best known for its Kuner's beans and Butter Kernel vegetables, also makes some organic products.
Organic production comes with a strict set of rules -- no pesticides, no herbicides -- laid out by the USDA. Those regulations, and the documentation they entail, are the prime reason organic foods cost more than their nonorganic counterparts.
With GE labeling as proposed in California, "it's like selling everything as if it were organic," MacDonald said.
A GE crop posed a significant U.S. food safety problem only once, back in 2000, said the U's Labuza. That's when a GE corn strain called StarLink, which wasn't approved for human food use, made its way into grain elevators and eventually taco shells. No one was harmed, though.
GE crops are also at the center of scientific debate over the creation of "superweeds" or super pests -- organisms that evolve around the very technology that is supposed to kill them.
But most scientists are on board with GE technology when it comes to food safety, said Alan McHughen, a biotechnology professor at the University of California, Riverside. So are medical groups and regulatory bodies, he said. "They can't find any meaningful science on the other side."
Still, scientific opinion on GE crops and food safety is far from universal. And while regulators worldwide have accepted GE-derived food, labeling is fairly common. About 60 countries, including much of Europe, require GE-related food labels.
Those labels are necessary because rigorous, long-term research is lacking on the health effects of GE-derived food, said Hansen of Consumers Union. He criticized the U.S. Food and Drug Administration, too, for not formally reviewing GE-derived food products before they go to market.
The FDA said in an e-mail to the Star Tribune that foods derived from GE plants must meet the same legal and safety standards as foods derived from their non-GE counterparts. The agency declined to answer specific questions, including on Proposition 37.
Like Consumers Union, the Center for Science in the Public Interest (CSPI), a food labeling and nutrition watchdog group, is also critical of the FDA's GE-food approval process. But CSPI, which is regularly at odds with the packaged-food industry, has not taken a position on Proposition 37.
Labeling shouldn't be a surrogate for safety, said Gregory Jaffe, CSPI's biotechnology director. "If it's unsafe, it shouldn't be out there, and labeling is irrelevant."
Mike Hughlett • 612-673-7003