Bakers lobby govt to help ease wheat crunch

WASHINGTON (Reuters) - U.S. bakers lobbied the Bush administration and Congress on Wednesday to build up wheat supplies and take other measures to dampen wheat and flour prices.

Robb MacKie, head of the American Bakers Association, said booming prices for wheat has brought the U.S. food industry to a crossroads -- threatening profits, jobs, and potentially boosting prices by double digits for consumers when they buy everything from bread to pizza.

"It's going to get much worse," MacKie told a news conference with other members of the baking industry, who will meet Agriculture Secretary Ed Schafer and other officials in Washington on Wednesday.

Commodity markets have been transformed in recent years by record prices and volatility, fueled in part by growing biofuel production, mounting demand and poor harvests.

This week, the Agriculture Department forecast the U.S. wheat supply would hit its lowest level since the 1940s, at 242 million bushels.

Such short supply has intensified nervousness for the bakers, who say they're afraid that some wheat varieties will be unavailable.

The association is hoping to build support for its plan to defray those prices, including shifting conservation land into production in wheat states, greater government flexibility on biofuel mandates, and steps to build up stockpiles at home.

Other sectors of the farm economy, livestock and dairy particularly, have also complained about the impact of high grain prices.

But the bakers' push is viewed with disdain from other quarters of the agricultural community as critics say they should have seen the price crunch coming.

The bakers insist are not seeking an export ban for wheat, but say they do want to reexamine programs, including export incentives and international food donations.

"Our concern is that there is a sense at USDA that this is a temporary blip," MacKie said.

The Bush administration has said it opposes steps to limit exports.

"What we are talking about is the end of an era in agriculture policy," said David Brown, vice president for procurement at Sara Lee Corp.

(Additional reporting by K.T. Arasu in Chicago; Editing by Marguerita Choy)