PRICE CHECK AS GROCERY PRICES SOAR, CONSUMERS FEEL STUCK PAYING SKY-HIGH BILLS FOR EVERYDAY FOOD.

Byline: Brent Hopkins Staff Writer

Putting food on Kelly Sayegh's table has become a major economic drain.

The Chino Hills notary has four young boys to feed, and the hungry kids go through food so quickly that she's running to the grocery store several times a week. That's no small cost as lately she's noticed prices creeping up at her local Albertsons, sending her bills above $200 a week.

``My oldest boy's 17 now, and with three others, as soon as I have the food off the stove, they've eaten it all,'' she said. ``Milk and things like that, I don't mind spending a little more, because your body needs it. What can you do, though? You can buy cheaper things, but there's no nutrition in it. I've noticed things going up, but what choice do you have?''

Not much, apparently. Gasoline and diesel prices have shattered records this spring and are virtually certain to rise even more sharply in the summer. Housing prices continue to soar. Stores are holding fewer sales as they've learned to keep inventory in line with consumer tastes. Experts blame everything from desperate dairy farmers to sickened chickens for rising grocery bills, with factors as disparate as higher fuel prices and a revived economy pitching in as well.

It's getting much more expensive to bring home the bacon. The Consumer Price Index released Friday climbed at a 3.9 percent annual compound rate in the first quarter, up 0.2 percent in April. Wholesale prices rose 0.7 percent last month, the Labor Department reported Thursday. Overall inflation climbed an annual 3.2 percent while disposable income rose only 0.4 percent, according to the most recent government statistics, and experts say that gap will only widen.

``We must see an increase in wages and salaries this year to keep up,'' said Ellen Tolley, a spokeswoman for the National Retail Federation. ``It's very hard for people to keep buying things if they don't have more disposable income than they did last year.''

Jose Martinez feels this each time his family goes to the supermarket. The registered nurse and his wife are raising 3-year-old twin boys who run through $200 worth of groceries a month, making increased prices for meat and milk strain his paycheck. He scoffed at the notion of an improving economy.

``It's not getting better,'' he said while shopping at a Pasadena Ralphs. ``It feels like it's getting worse, with prices going up like this.''

The quick pace of rising costs worries retail analysts, who fear it could put the brakes on the retail sector's recovery. Theories differ so widely on why prices have risen that the only consensus that has emerged is that prices are accelerating too quickly.

``Is the increase real or manufactured?'' Aubie Goldenberg, a partner with Ernst & Young's Los Angeles office who follows retail, wondered rhetorically. ``It's perfectly possible that there are people in the supply chain shorting the market and inflating the prices. Is it inflation? Is it temporary? We can sustain some of it because the economy's good, but it can't continue at the pace we're seeing without having negative impacts.''

Consumers can chalk some hikes up to specific causes. Milk prices' recent hike above $4 a gallon reflects the California Department of Food and Agriculture's decision to raise the minimum processors can pay to farmers - the farm gate price - to $1.85 a gallon in Southern California after dairy farmers took herds out of production in response to record low prices in recent years.

Lingering effects of mad cow and exotic Newcastle diseases and Asian bird flu drove up beef and chicken prices, but other prices appear to be on the rise for more nebulous reasons.

``The grocery business is like anything else,'' said Dave Heylen, vice president of communications for the California Grocers Association. ``There's labor costs, loss-prevention issues, weather, everything that happens out in the field that's out of the retailer's control. And if you look at how the overall economy's doing, that'll be reflected in prices in the store.''

With dairy prices on the rise, Mike Shotts gets caught in the middle. As general manager of Farmdale Creamery Inc. in San Bernardino, which makes cheese, sour cream, buttermilk and butter, he gets charged more by milk producers and has to raise prices. Consumers, however, are less than receptive to the hikes.

``It hurts sales,'' he said. ``When milk goes up, we pass it along to the customer. All that money goes to the producer. There's big players out there that can control the market, but we're not that big.''

Other consumables are up, as well, but for less-determined reasons. Somi Rehil, a buyer for Larry's Produce in Reseda and owner of Karma Vegetarian Cuisine restaurant, reported that his costs for eggplant, grapes, bell peppers and iceberg lettuce have all shot up in recent months.

``I've never seen vegetables this expensive in the last three years,'' Rehil said. ``Some have gone up three times in price. Tomatoes are sky- high. In the last two weeks, we paid close to $30 a 25-pound box. A month ago, it was $10. You've got to pass it along to the consumers, otherwise you won't make any profit.''

For the consumer, that's a bit of a hard sell. Sandra Pickens, a Long Beach secretary for the Department of Veterans Affairs, pushed a big cart without much in it as she roamed the aisles of her local Albertsons, looking for a deal.

``I'm really surprised at the bread,'' she said, shaking her head. ``It's disgusting! And I'm not even going to look at the milk. I've just been walking around because I'm just shocked about the prices.''

Brent Hopkins, [phone]

brent.hopkins(at)dailynews.com

CAPTION(S):

2 photos, chart

Photo:

(1 -- color) no caption (Groceries)

(2 -- color) no caption (Milk)

Michael Owen Baker/Staff Photographer

Chart:

MILK MONEY

SOURCE: California Department of Food and Agriculture