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Whole Foods Market, Inc. (WFM), Monsanto Company (MON): Is This Stock Worthless?

The campus of the FDA’s Center for Food Safety and Applied Nutrition is under siege today, and it has everything to do with Monsanto Company (NYSE:MON). Members of the Occupy Monsanto movement are staging an all-day “eat-in” to label food products that contain genetically engineered (GE) ingredients. They’re easy to dismiss, like an especially curmudgeonly Facebook commenter who described them as “hordes of crazed, anti-Monsanto Company (NYSE:MON), vegetarian hippies” did. That may well be true, but they are part of a broader movement that could pose a challenge to ag biotech’s comfortable dominion over our food supply.

Whole Foods Marlet Inc WFM

Label it
There is a growing movement among grassroots activists, NGOs, and natural and organic food companies to require labeling of food products containing GE ingredients. Whole Foods Market, Inc. (NASDAQ:WFM), the leading natural foods grocer, recently committed to labeling all of its products voluntarily within five years. Big Food companies spent heavily on campaigns against a proposition in California that would have mandated labeling and successfully torpedoed the bill. But there’s more where that came from. Vermont, Connecticut, and Iowa all have some form of labeling requirement making its way through the legislative process.

The New York Times recently reported that 20 major companies, including PepsiCo, Inc. (NYSE:PEP), ConAgra Foods, Inc. (NYSE:CAG), and Wal-Mart Stores, Inc. (NYSE:WMT), met in Washington, D.C., to lobby the FDA for a federal GE-labeling law. The idea is that companies prefer one federal law to a proliferation of state laws that would add to their compliance burden. Implicit in that notion is that a labeling requirement is inevitable.

All three branches of government?
The Supreme Court heard arguments on Feb. 21 in the case of Bowman v. Monsanto Co (NYSE:MON). The central question is whether farmers who buy Monsanto Company (NYSE:MON)’s Roundup Ready soybean seeds are free to do as they wish with the seeds harvested from those plantings. The justices seemed almost unanimously opposed to the farmers’ arguments, and they appear poised to rule in Monsanto Company (NYSE:MON)’s favor. In a highly unusual move, the U.S. government not only filed an amicus brief supporting Monsanto Company (NYSE:MON) but also sent a government attorney to argue on the company’s behalf, highlighting the Obama administration’s support for several elements of Monsanto Company (NYSE:MON)’s argument.

In March, Congress passed and President Obama signed H.R. 933, a law that anti-GE advocates have dubbed the “Monsanto Protection Act.” Section 735 strips federal courts of the authority to halt the sale and propagation of genetically modified seeds and crops if concerns about health risks arise during safety tests. Did you catch that? Let’s pretend we’re talking about cribs instead of seeds. The corollary law would then say that if little babies’ fingers kept getting chopped off in crib safety testing, the courts couldn’t get involved. Disgraceful.

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