Inflation hits hard in Hawaii

Residents have long paid above-average prices and the latest inflation spike is especially rough.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Chris Lawrence, CNN

American Morning
Start your day with the 'Most News In the Morning' every weekday beginning at 6 a.m. ET.

Honolulu (CNN) -- Imagine going to your local grocery store and paying over $8 for a jar of Jif peanut butter. How about $5.50 for a loaf of white bread, $6.50 for a gallon of milk or $7.19 for a half-gallon of orange juice?

These are just some of the prices we found in a recent survey of Hawaii's supermarkets. Families there are certainly paying the price for living in paradise.

Dave and Susan Ohamada were leaving the Honolulu Safeway when we asked to see their bill.

"I just spent $4.29 for a half-gallon of milk - and that was a sale price," said Susan. "Kleenex! I bought Kleenex for $2.99!" The Ohamadas have two young daughters, Rachel and Erin, and these days, shopping for a family of four is enough to empty their wallets.

Families like the Ohamadas have lived their whole lives in Hawaii, where about 80% of the food has to be imported from the mainland. So even in the best of times, food is more expensive here.

Last year overall inflation was up 4.8% in the Honolulu metro area, while food prices were up 5.5%. That compares to a 2.8% national inflation rate, and a 3.9% rise in national food prices.

Recently however, prices have started shooting up even higher. With the explosion in fuel prices, shipping companies have been tacking on fuel surcharges, and they're going up almost every week.

Tim Kennedy runs a Los Angeles-based warehouse that ships produce to Hawaii. "We're seeing these increases from all over. From the trucks that bring this product into here, to the airlines, to the ships that take these containers to Hawaii."

Kennedy said he's absorbed some of the costs, but not all. "It's a chain. It starts on one end and ends up at the consumer at the checkout stand."

Which means lettuce is running $2 per pound. Tomatoes are at $6.39 a pound and a 3-pack of red peppers costs $7.

Ira Rohter is a professor at the University of Hawaii, who has studied the state's agriculture business. Rohter sees no let-up in the high prices, and said Hawaii's residents have only one choice: "You grow your own food. You may not have noticed, we can grown our own food in Hawaii."

Rohter said the islands will never be 100% self-sufficient, but sees good agricultural land that would reduce how much it has to import. That land, however, is expensive. You can't afford to grow celery and carrots on land that costs $80,000 an acre. Furthermore, since most farmers here have short-term leases, there's no real incentive to invest in technology that improves production.

So, some shoppers have adapted on their own. Corrine Tantog has five kids to feed, but she recently started buying only what's in season: "I went to a nutrition class so that kind of helps. They tell you how to buy food."

That means going without luxuries such as ice cream, which costs about $7.60 per gallon. But when a box of cereal can cost nearly $8, and $7.19 only buys one pack of Kraft American cheese slices, saving money is easier said than done. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
50 years of the Ford Mustang Take a drive down memory lane with our favorite photos of the car through the years. More
Cool cars from the New York Auto Show These are some of the most interesting new models and concept vehicles from the Big Apple's car show. More
8 CEOs who took a pay cut in 2013 Median CEO pay inched up 9% in 2013 to $13.9 million. But not everyone got a bump last year. Here are eight CEOs who missed out. More


Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.