"USDA has become a rogue agency in its regulation of biotech crops and its decision to appease the few companies who seek to benefit from this technology comes despite increasing evidence that GE [genetically engineered] alfalfa will threaten the rights of farmers and consumers, as well as damage the environment," said Andrew Kimbrell, executive director for the Center for Food Safety.
He said the group plans to sue.
Critics say the complete deregulation of genetically modified alfalfa stems from the Obama administration's recent push to reach out to the business community and take steps that are considered business-friendly.
Obama signed an executive order earlier this month to make clear the administration seeks to strike the right balance with regulations, neither "placing unreasonable burdens on business; burdens that have stifled innovation and have had a chilling effect on growth and jobs" nor failing to "protect the public interest."
The administration, the president wrote in a Wall Street Journal op-ed, is "making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb."
Farmers already grow genetically modified soy beans, corn and cotton, among other crops, which are engineered to produce higher yield, thrive in adverse growing conditions and resist pesticides that kill weeds. Producers say the technology results in cheaper prices for consumers at grocery stores.
"Roundup-ready alfalfa is as safe as traditionally bred alfalfa," secretary Vilsack said Thursday. "All of the alfalfa production stakeholders involved in this issue have stressed their willingness to work together to find solutions."
But some Americans don't want to eat genetically modified foods for health or ethical reasons.
Organic foods have become big business, with producers reporting $26 billion in annual sales last year. While only 4 percent of U.S. agriculture involves organic products, the industry has posted double-digit growth in gross profits nearly every year for the past decade.
"The growth is there because this is what consumers are demanding. They want organic products," said Christine Bushway, executive director of the Organic Trade Association.
"If our supply chain gets disrupted by these genetically- modified crops and we can't supply the organic goods, then will severely hamper the choices for consumers."
ABC News' Brian Hartman contributed to this report.