The news came in a letter three paragraphs long. Muzio Bakery Co. closes today after 79 years in Sacramento, word that has sent local restaurants and sandwich shops on a mad dash to find a new baker.

The decision by the longtime wholesale baker is rippling through the area's eateries. Some 200 businesses from Sacramento to Winters, Galt to Placerville get their french bread and rolls from Muzio Bakery Co.

It's the end of an era in Sacramento, and whether it's a retail outlet, a restaurant or an auto dealership, it's another example of the regional impact felt when a local business locks the doors for good.

"The writing was on the wall. We thought we could ride it out, but … we just couldn't continue to raise our prices," said David Fahn, who owns Muzio with father Mervin Fahn, who bought into the business in 1955, eventually taking over the bakery. "We're not making money, we're losing money."

That has sent Travis Hausauer to the phone book. His Squeeze Inn in the Avondale neighborhood goes through 20 dozen Muzio-baked buns a day, one order among the 2,500 loaves and 1,000 dozen rolls Muzio has churned out every day.

"Part of our success is due to them," Hausauer said. "Now we're scrambling to find someone to take their place."

Rocked by high prices for ingredients such as flour and soybean oil, soaring fuel and labor costs and increased competition from all directions, many independent bakers are fighting to survive. Some, like Sacramento landmark Muzio, are losing.

A sputtering restaurant industry in a struggling economy has also affected the bakers' bottom line.

To break even, the Fahns hoped to renegotiate the bakery's contract with its union, an expired deal the bakers had been working under for four years.

"We needed to ask the employees to make some concessions in pay," David Fahn said. "We notified the union that this was our final- final offer to keep us from the breaking point."

But the concessions were too great, said Jerry Gil, an agent with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union Local 58, the local bakers union. Among them, a cut in pay from $18 to $10 an hour. A second option would have cut pay to $16 an hour, but employees would no longer receive health benefits, he said.

A counteroffer in which employees would contribute more money toward the company's benefits plan was rejected, Gil said.

Fourteen employees, including the company's eight bakers, will lose their jobs.

"Merv has always been a good employer. We had a good relationship," Gil said. "I'm saddened by it. (Muzio has) been around for a long time. Our members wanted to make it work, (but) they've got mortgages and bills to pay."

The two have a long, shared history. Muzio began in Stockton in 1882, opening shop in Sacramento in 1929. The bakers local was established 103 years ago.

"It's a sad day in Sacramento and in the baking industry," said Marty Zimmerman, principal officer of the bakers union. "We're very sad, but we didn't make the decision to shut the doors."

Even as the Muzio closing rumbles through the Sacramento restaurant community, similar shockwaves have shaken the larger bakery industry.

"The volatility with the changes that have come to pass has been so great, so abrupt and so continuous that some independents maybe didn't have the resources to match the situation," said L. Joshua Sosland, editor of Milling & Baking News, a baking industry journal.

At Muzio, which uses about 20,000 pounds of flour a week to bake its French and sourdough breads, the math quickly adds up.

Soybean oil has bounced from 57 cents a pound in March to 66 cents in July to 51 cents at the end of August, according to Milling & Baking News. Flour prices have finally begun to settle at roughly $19 a hundredweight after pushing past $30 earlier in the year; sugar costs hover near 40 cents a pound, a dime-per-pound increase since March.

Private sellers and buyers determine actual prices, Sosland said, but the numbers serve as a market barometer showing what independent bakers and others in food industries have endured in recent months.

"It's a very tough time. The bakery in Sacramento is not alone. It's literally a perfect storm right now," said Nicholas Pyle, president of the Independent Bakers Association, a Washington, D.C.-based trade group. "The small independent and the large wholesaler are in a precarious situation."

At Muzio, the office phone rang throughout the morning with customers on the other end of the line.

"It's going to be emotional for a lot of people – the owners, the employees, customers, too, when the last screens are pulled off," David Fahn said.

Call The Bee's Darrell Smith, (916) 321-1040.