UPDATE 1-Biofuels add to U.S. food prices - Bush officials

(Adds farm groups call for food-price probe; paragraphs 3, 6-17 new)

By Charles Abbott and Jasmin Melvin

WASHINGTON, June 12 (Reuters) - Biofuels account for a small but growing share of higher U.S. retail food prices, two senior Bush administration officials said ahead of a Senate hearing on the issue on Thursday.

Food prices are forecast to rise by 5 percent this year, the largest increase since 1990, according to the Agriculture Department. Another year or two of high food inflation is forecast.

Six major U.S. farm groups called for a congressional investigation of the factors behind higher prices. "Food companies are trying to pass the blame onto farmers while many are enjoying record profits," said Tom Buis, president of the National Farmers Union.

Fuel ethanol, distilled mainly from corn, and biodiesel, made from soybeans and other oils, was responsible for 0.10 to 0.15 percentage point of 2007's 4 percent increase in the Consumer Price Index for food, according to federal researchers.

"In other words, ethanol and biodiesel consumption accounted for approximately 3 to 4 percent of the overall rise in retail food prices," Agriculture Secretary Ed Schafer and Energy Secretary Samuel Bodman wrote in a letter to the Senate Energy Committee.

Biofuels were responsible for 0.20-0.25 percentage points of the rise in CPI for food during the first four months of this year, estimated at 4.8 percent, Joseph Glauber, the Agriculture Department chief economist, told the Senate Energy Committee.