The Unknown Costs of Food Production: One Farmer’s Perspective on the Impacts on Food Production Costs of Labeling Foods Produced through Biotechnology

The Unknown Costs of Food Production: One Farmer’s Perspective on the Impacts on Food Production Costs of Labeling Foods Produced through Biotechnology 


Repurposed from a blog post written by Jennie Schmidt, MS, RD, author of The Foodie Farmer blog

There has been much discussion around whether requiring labeling of foods produced through biotechnology (also commonly referred to as "GMOs" or “genetically modified” foods) would add significantly to the cost of food production and, therefore, raise food prices. Jennie Schmidt, a farmer based in Sudlersville, Maryland, recently published a pictorial analysis of the food production supply chain on her blog, the Foodie Farmer, starting from her farm gate, to explain the many costs involved in food production and how they would be impacted should labeling of foods produced through biotechnology be required. Food Insight has adapted the post into a Q&A below for readers.

FI: Walk us through the steps a crop goes through once it is harvested, and how mandatory labeling would impact the costs associated with those steps.

JS: Using corn as an example, first, the corn is planted in the spring, around May.  By fall, it looks like this. 


It gets harvested between September and November.


The corn is then transferred from the combine to a tractor trailer truck. 


The grain is hauled to our on-farm grain bins for storage, which hold about 50,000 bushels, or less than 25 percent of our total yields of corn, soybeans, wheat, and barley.


When it’s time to sell, we load the trucks and haul it to the local grain elevators. All of the neighboring farmers also deliver to the same elevator. This is called  “commingling,” where our crop is combined with that of the other farmers and stored together, regardless of the variety or trait of corn that was grown (i.e. Both conventional and biotech varieties).

FI: How does that impact cost? 

JS: Currently, the food supply chain in the United States relies on a system of commingling, grain delivered to the elevator by farmers throughout the region. For example, my home state, Maryland, has 2 million acres of farmland, nearly a half million of which grew corn in 2012. In a below average growing year, Maryland farmers produce 53 million bushels of corn.

In order to segregate conventional and biotech corn, soybeans, and canola, as well as the different types of biotech crops from one another, additional infrastructure (i.e. physical storage) would be required along the entire food supply chain – from farm gate to grain elevator, to processor, to manufacturer. 

If mandatory GE labeling were to pass, that would require a huge addition to both on- and off-farm storage. Nationally, billions of dollars in infrastructure would be needed to segregate grain. The more the grain is segregated (by trait, by variety, or both), the more infrastructure is needed and the more the costs escalate. 

FI: Why segregate, then?

JS: In many cases, we get paid a premium for ensuring that specialty grains and seeds are "identity preserved.” Identity preservation is very much like the certified organic process, involving higher management and tracking, and having systems in place to ensure that the grains and seeds are of the highest quality and are all uniform in size, shape, and color, and free of weed seed and contamination. This year, we will have 900 acres of grains and seeds requiring some identity preservation, which will need to be tested for the presence of biotech and to ensure that they are genetically consistent to their parent seeds. This requires us to use some of our grain tanks for segregation and to take more steps than we would normally, such as cleaning equipment, trucks, trailers, planters, harvesters, grain bins, etc. to ensure that we have preserved the identity of that crop. It is an inherently more costly system.

FI: What are the costs of grain storage? 

JS: Based on the USDA Crop Production 2013 Summary, there are 13 billion bushels  of on-farm storage in the United States, and 10.4 Billion bushels  of off-farm storage in the United States. Last year, U.S. Farmers grew 23.5 billion bushels, all of which require storage.

Crops Grown by U.S. Farmers in 2013:
•    13.9 billion bushels of corn
•    389 million bushels of sorghum
•    421 million bushels of rice
•    3.3 billion bushels of soybeans
•    2.1 billion bushels of wheat
•    215 million bushels of barley
•    1 million bushels of oats
•    7.6 million bushels of rye
•    18 million bushels of millet
•    3 million bushels of flax seed
•    7.8 million bushels of safflower
•    1 million bushels of canola
•    65 million bushels of sunflower
•    38 million bushels of rapeseed and mustard seed
•    301 million bushels of lentils
•    937 million bushels of dry peas
•    250 million bushels of peanuts
•    1.5 Billion bushels of other dry edible beans including:
•    light red kidney
•    dark red kidney
•    Great Northern
•    baby limas
•    large limas
•    pinto beans
•    small white
•    navy beans

We have storage capacity of 23.6 billion bushels without the extra infrastructure needed to segregate conventional and biotech crops. A new grain bin costs approximately $2/bushel to buy and install, so a 50,000 bushel bin would cost $100,000.

FI: To have sufficient storage for currently commingled grains and seeds once they are segregated, what would be the cost?

JS: It depends on how they are segregated.  In order to have true traceability, biotech seeds and grains would have to be segregated by trait, so herbicide-tolerant grains would have to be segregated from Bt (insect-protected) grains, and the stacked or combined grains would have to be segregated from those that are only Bt or only RoundUp Ready, and the combinations of traited grains would have to be segregated by the combination or stack of traits in the seeds too, because otherwise, you don't have "truth in labeling" to say which biotech grain (RR or Bt) is in the product. . 

FI: Couldn’t you just separate biotech from non-biotech, regardless of which trait it is?

JS: Not according to current labeling legislation. Absolute segregation by trait or a combination thereof is what would be required to meet the demands of GE labeling legislation in various states across the U.S. True GE labeling would require vast capitalization of infrastructure to segregate grains and seeds by trait, which would come at an astronomical cost.

FI: What are other costs of food production besides grain storage?

JS: I can't even begin to fathom the costs that it would take to segregate all along the entire food supply chain, keeping GE corn, soybean, or canola ingredients segregated by trait from their conventional counterparts from the farm to the processor to manufacturer. It would likely cost billions of dollars to maintain the absolute traceability of a specific genetic trait in a seed from the farm to the final product.  

FI: What is the bottom line when someone says that it would not be costly to label foods produced using biotechnology? 

JS: Those who say mandatory GE labeling won't add to the consumer's grocery bill are not taking into account that true traceability in our food supply system will be hugely expensive and that expense would have to be passed along to the consumer. In addition, adding the necessary infrastructure to provide for true traceability may not even be feasible. But there is a much bigger issue at hand, which is the need for science-based decision-making and ultimately, when looking at the safety and nutritional composition of biotech versus conventional foods, a label is not necessary and could mislead already confused consumers.

Jennie Schmidt, MS, RD, is a dietitian turned farmer. She and her husband and his family own and operate Schmidt Farms, Inc., a 2000-acre, 3rd generation family farm on the Eastern Shore of Maryland that grows corn, soybeans, wheat, barley, hay, tomatoes, green beans, and wine grapes. The farm has practiced all different types of farming systems, including conventional, biotechnology, and certified organic. In 2011, she was selected America's Farm Mom of the Year for the Northeast Region.