Food prices in Alaska could outpace nation

Posted: Sunday, August 31, 2008

FAIRBANKS - Food prices in Alaska could rise more quickly than they are nationally, due to the costs of shipping items to the state, an economist says.

"The energy prices will work their way into the food prices," says Dan Robinson, an economist with the Alaska Department of Labor and Workforce Development. "Everything is going to get more expensive as it gets more expensive to get stuff here. I don't think all those increased transportation costs have worked their way in."

Nationally, food prices are increasing faster than predicted for 2008, even as economists warn consumers to brace for record costs in 2009. U.S. Department of Agriculture forecasters recently upgraded their 2008 increase estimates from between 4.5 percent and 5.5 percent to between 5 percent and 6 percent, the largest annual hike since 1990.

And prices are expected to jump another 4-5 percent in 2009.

So far in Alaska, some retailers are shouldering the transportation costs rather than passing them on to customers, Robinson said, but that can't go on indefinitely.

Fuel prices are declining slightly, but it's hard to say whether that will be enough to offset the rise in prices through the first seven months of the year.

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