Study reports cost of GMO food labeling would cost $800 annually

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State mandatory labeling laws, such as recently enacted in Vermont and proposed in New York State, among other states, would cost the average family of four an average of $500 in additional food costs each year and could be as high as $800, according to a new study from Cornell University.

In a study released Monday, Professor Bill Lesser of the Dyson School of Applied Economics and Management at Cornell University outlined the added costs that the industry will pass down to consumers if forced labeling becomes the law in New York. Additionally, the state of New York could be facing millions of dollars in added costs to implement and monitor a labeling initiative.

Forced labeling would impact virtually every aspect of the food production industry-from seed to store shelf. Additional costs levied on farmers and producers, warehousing and distribution centers and inventory management would all contribute to added costs to consumers.

The study calculated that between 60-66% of foods sold in New York State would be exempted. The 40% of mandated-labeled foods transcribes to 21,000-25,000 separate labeled items, or 50-58% of items available in supermarkets.

Firms can comply with the proposed labeling requirements by either labeling or by using ingredients below the specified GM threshold level of 0.9%. Labeling costs involve, in addition to the labeling function itself, the annual costs of warehousing more items as well as the charges leveled for stocking 'new' items by supermarkets. As estimated here those costs for a family of four range from $64-68, with a midpoint of $66.

The second approach to compliance is using non-GM ingredients, which may be either produced not using GM seeds, or organic. Those ingredients though are more costly, particularly organically grown ones. Additionally, the GM and non-GM products must be kept separate ('Identity Preservation') which involves both handling and record keeping costs. For the non-GM option estimated costs, again for a family of four, range from a low of $44 to a high of $412, with a midpoint of $228.

The costs for using organic ingredients are respectively $360 to $1,552 with the midpoint at $956. Additional costs to the State include the potential loss of net farmer income from producing GM corn and soybeans, which while very real for State farmers is minor compared to direct consumer costs.

There are additionally regulatory costs which are borne by the State. Adding one dollar per capita for all those costs brings the maximum range of cost, for the four person household, to $48 to $1,556 with a midpoint of $800.

"The bottom line is that food costs will increase dramatically as a result of this mandatory labeling bill, "said Rick Zimmerman, Executive Director of the Northeast Agribusiness and Feed Alliance. "This new study from Cornell illustrates how this legislation, if passed would directly impact those least able to afford it."

Read the full study here.

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Jim Ruen    
Minnesota  |  May, 27, 2014 at 03:53 PM

This story is very misleading as is the study itself. The costs cited entail a family switching from current (assumed GMO) to a combination of GMO labeled, non GMO and organic. In fact, if you look at the report, the only costs ascribed strictly to labeling are as follows: 1 LABEL: account for warehouse, store costs, labeling Annual Family 4: $64(L) $66(Mid) $68 (H). This doesn't explain how much it costs consumers overtime Wheaties changes the face of their champion or how costly it was to consumers when the Federal govt. changed the dietary labeling. This also assumes the costs of the supermarket/supply system having to add products etc. If people don't care about GMO ingredients, the only cost is relabeling the existing 40% of the products using GMO crops. If the industry simply chooses to do so, that should not include the cost of alternative product warehousing/handling as that is the choice of industry. No one is forcing them to do so anymore than anyone is suggesting people be "forced" to avoid GMO products. The assumption is and has been that GMO sourced ingredients are safe. The industry says so as does the FDA/USDA, etc. If that story is successfully told, there should be little chance that people will opt to spend the $4-500 suggested in this study for alternative products. Why are so many of us in agriculture so quick to assume that the consumer won't make an economic and science based decision that fits their interests? What are we scared of? What this does do is create new economic opportunities for farmers to produce added value products if the consumer is willing to pay for non- GMO products and for retailers to supply these farmers with non-GMO seeds and supporting inputs. Seems like a win-win

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