CHICAGO (Reuters) - A type of genetically modified wheat developed by Argentina's Bioceres Crop Solutions ( BIOX ) may be safely grown and bred in the United States, the U.S. Department of Agriculture said on Tuesday.

Bioceres must still complete additional steps, including field trials, that will take years before it can commercialize HB4 wheat, modified to tolerate drought, industry group U.S. Wheat Associates said.

Still, USDA's finding moves genetically modified wheat closer to production in the U.S. in a potential win for farmers grappling with drought and more severe weather, despite concerns among some consumers.

"Wherever wheat is grown in the world, drought takes its toll on yields and quality, so an innovation like HB4 holds a lot of interest for growers like me," said Michael Peters, an Oklahoma wheat farmer and past chairman of U.S. Wheat Associates.

Genetic modification involves altering a plant's makeup by transferring DNA from one organism to another and is common in crops such as corn, used for livestock feed. Some consumer groups oppose genetic modification of wheat over concerns about human health since it is widely used to make bread and pasta, and therefore consumed directly by people.

USDA's decision on HB4 wheat is farther than the agency has ever gone with genetically modified wheat, U.S. Wheat Associates said.

Bioceres declined to comment.

The company has said opposition to genetically modified wheat is easing due to soaring food prices and because GM crops can survive drought and pests, reducing the risk of famine.

In May, Bioceres said it started sales of genetically modified wheat seeds in Argentina, the first time the technology became commercially available to farmers anywhere in the world.

The U.S. Food and Drug Administration concluded a review of Bioceres' wheat in 2022 without further questions. The FDA oversees the safety of food from new GM crops before they enter the market, while the USDA reviews the impact on agriculture and the environment.

Bioceres also has regulatory approval for food and feed use in Nigeria, Brazil, Colombia, Indonesia and South Africa, and farmers are growing HB4 wheat in Argentina and Brazil, according to U.S. Wheat Associates.

Top buyers of U.S. wheat, including Mexico, the Philippines and Japan, have not approved it.

Two decades ago, Monsanto Co was working to commercialize wheat bred to withstand treatments of its weed-killer Roundup, but the company halted that effort in 2004. International buyers had threatened to boycott U.S. wheat if the product was introduced to the marketplace. Bayer AG purchased Monsanto in 2018.