Illegal genetically-engineered wheat has been discovered growing in an Eastern Oregon field, which may cause severe marketing and export problems for one of the state's biggest crops.

State agriculture department Director Katy Coba said 85 to 90 percent of the Pacific Northwest's soft white wheat crop is exported to Japan, South Korea, Taiwan and other nations, where it's used to make noodles and crackers. Oregon's wheat crop is valued at $300 million to $500 million annually, depending on yield and price.

"Clearly there's a concern about market reaction," Coba said. "Japan and Korea jump out. They do not want genetically-engineered food, they do not want genetically-engineered wheat. They could shut off the market to us."

If that happens, Oregon may have to institute testing of its shipments to prove they do not contain genetically engineered - or GE - material, Coba said. The wheat industry would have to pay for it, she said.

Coba and federal agriculture officials insist the particular variety of GE wheat is safe for human consumption or for use as animal feed, but the discovery this month outraged activist groups that have long warned about the potential adverse health effects of genetically modified crops.

The Center for Food Safety, based in Washington, D.C., said the U.S. Department of Agriculture has "once again failed to protect the food supply from GE crop contamination."

In a prepared statement, Executive Director Andrew Kimbrell said the incident shows stronger regulation is "long overdue" and the agriculture department should immediately ban open-air field testing of GE crops.

A 2005 study estimated that the national wheat industry could lose $94 to $272 million annually if GE wheat were introduced, because many markets oppose or prohibit modified crops, according to the Center for Food Safety.

GMO Free Oregon, a group opposed to the presence of genetically modified organisms in the food supply, said the "crisis" should lead to greater regulation of Monsanto Co., which produces genetically engineered seed and the herbicide glyphosate, marketed under the brand name Roundup.

The incident threatens Oregon's wheat export markets and the livelihoods of the state's wheat farmers, GMO Free Oregon spokesman Scott Bates said in a prepared statement. In addition, organic farmers are very concerned about cross-pollination, he said. The group helped organize a March Against Monsanto in Portland last weekend.

The investigation began when an unidentified Oregon wheat farmer noticed that some wheat plants he had sprayed with glyphosate had survived. Genetically-engineered wheat is resistant to glyphosate, and such plants are often referred to as "Roundup resistant" or "Roundup ready" because they resist the Monsanto product.

The farmer was preparing a field for planting, which often involves killing weeds or plants that sprout voluntarily from seeds knocked loose during harvest. However, some wheat plants that had popped up survived spraying with glyphosate.

The farmer reported it to an Oregon State University researcher and delivered plant samples on April 30. Initial tests showed the presence of a transgene that conveys resistance to glyphosate, according to a U.S. Department of Agriculture website. The OSU scientist notified the USDA on May 3, touching off the federal investigation.

The USDA is taking the discovery seriously, and has nine investigators on the ground in Oregon, said Mike Firko, acting deputy administrator for biotechnology regulatory services. He works for the USDA's Animal and Plant Health Inspection Service, or APHIS.

No varieties of genetically-engineered wheat have been approved for planting, Firko said, and its presence in the Oregon field is a potential violation of federal law, punishable by up to a $1 million fine and other penalties. At this point, Firko said, investigators don't know how the plants appeared in the 123-acre wheat field. No other GE plants have been discovered so far, Firko said Wednesday.

"I'm not going to speculate on what may or may not have happened," he said. "One small field in Oregon with some plants, that what we've got."

Federal investigators have no reason to believe the farmer who reported the plants has committed any infraction.

Blake Rowe, chief executive of the Oregon Wheat Commission and Oregon Wheat Growers League, praised the farmer for reporting the plants.

"The grower did the right thing, at some personal risk," Rowe said. "He did something that was really important from the industry standpoint."

"This is not supposed to happen," Rowe said. "Given that it did, the best thing is to figure out how it did happen, and what do we do about it."

APHIS last approved field trials of glyphosate-resistant wheat in Oregon in 2001. Trials also occurred in 15 other states — including Washington, Idaho and California — from 1998 through 2005, but GE wheat has not been approved for commercial sale or planting.