Food, fuel price spikes hit hard

MAT-SU — Diane Norcross knows the luxury of occasional splurging at the grocery store is probably over. Food prices, fuel prices and energy prices are skyrocketing faster than many families can keep up.

For Norcross, the higher cost of living means fewer fishing trips, fewer nights out on the town and more concentration on feeding her family.

“Everything’s going up in general,” said Norcross while on an early Saturday shopping trip to Carrs grocery store in Wasilla.

The Meadow Lakes resident was buying food for a fishing trip the family had planned for this weekend, but as she cruised the aisles of products, prices that have risen dramatically over the past year stood out.

“I’ve noticed a very significant jump in my grocery bill,” Norcross said.

That jump would reflect the average cost of food in Alaska being about 7.6 percent higher than a year ago. The USDA reports that in April, the latest numbers available, the average family of four on a moderate budget spent about $926 on food. That’s a significant increase over April 2007, when the same family spent about $860.50. That also puts Alaska well ahead of the rest of the United States, which the USDA reports is up 4.4 percent from a year ago, which is also the largest single-year jump in food prices since 1990.

Higher food prices that have affected the United States can have more of an impact in Alaska, as the state’s position relative to where much of the food is coming from puts it in a logistical price trap.

Getting goods from Lower 48 producers to Alaska requires more than simply trucking them in. Most food must also be put on barges or flown in to the state, which increases transportation prices already affected by higher oil costs. In Alaska, where the price of gasoline is one of the highest in the nation — currently at an average of $4.399 a gallon for regular unleaded in the Mat-Su Valley — the cost of filling up a semi truck to make a delivery from Anchorage to the Valley is passed to the consumer.

Dan Grondahl, a clerk at D&A Shop Rite in Wasilla, said he hears customer woes every day, mostly about fuel and food prices.

“It seems whenever I talk to a customer they understand the correlation between fuel costs and food prices,” Grondahl said.

The prices of goods at a grocery store are largely dependent on two things: the product’s price and how much it costs to get it to the store, Grondahl said. While grocers can control which supplier they use to buy their products — giving an option on price — fuel prices incurred by transportation companies are out of the store’s control.

Dry goods, such as canned food, seem to have risen the most in price because of their weight, Grondahl said. The heavier an item, the more it costs to ship it.

For many families in the Valley, keeping up with rising food and fuel prices is straining budgets, and the national outlook isn’t rosy for the immediate future. Devastating flooding in the Midwest is ruining crops. Reports of wiped out soybean crops across Illinois, Iowa and other states are driving up costs for cattle farmers.

Analysts have reported the prices of beef, pork, chicken, milk and eggs will rise exponentially because of the flooding. But those reports are largely directed at Outside consumers and rarely take into account the added transportation costs to Alaska.

Also, the state’s unemployment rate is at its highest since February 2005, state labor officials report. More than 24,000 Alaskans are estimated to be out of work.

Norcross said she realizes there is no easy answer for families stretching their budgets to buy the basics.

Help could come in the form of Gov. Sarah Palin’s proposed $1, 200 energy relief plan. If passed by the Legislature, every Alaskan eligible for the 2008 Permanent Fund dividend would also get a one-time $1,200 check to help offset the high cost of energy.

That money is also not confined to paying for energy costs — a fact that’s raised concerns among some lawmakers — and if the initiative passes, Alaskans could apply the funds to anything, including grocery bills.

Many are going back to what seems like more Alaska-style methods of feeding their families: hunting and fishing. More than one shopper at Carrs Saturday said they were just buying the basics, eating more moose meat and as much fish as they could.

Norcross said her family will do the same, hoping to catch enough fish during the weekend fishing trip to last the winter. She’s also paid more attention to her garden this year, making sure a variety of homegrown vegetables will make it to the dinner table.

It’s still unclear just how high food prices will rise — or when it will stop — but the wide-ranging effects are hard to miss.

“Unless you absolutely have to, you don’t spend your money,” Norcross said.

Contact Michael Rovito at 352-2252 or michael.rovito-@frontiersman.com.