This Corner of Paradise Has the Highest Food Prices in America

by Colman Andrews, Wall Street 24/7, March 18, 2019

Palm trees, beaches, balmy weather, a famously laid-back lifestyle…Hawaii is truly an American paradise.

There’s a downside to living in this tropical Eden, though: It’s very expensive. According to a 24/7 Wall St. study of what it costs to live in America’s most expensive cities, a family of four will spend an average of $9,632 per month for the privilege of residing in Honolulu, the state capital — reflecting a cost of living that’s 24.4% higher than the national average.

Food plays a major role in that cost of living. Hawaii’s overall grocery prices are the highest of any state in the nation (only Washington D.C.’s are higher). And a 24/7 Wall St. survey of average prices for a half-gallon of milk, a dozen eggs, and a frozen meal in 50 major metropolitan areas revealed that the American city with the priciest groceries, by those standards, wasn’t even bustling Honolulu, but low-key Hilo on Hawaii’s Big Island, population 45,648.

Why is food so expensive in Hawaii? While between 85% and 90% of the state’s food is imported, it’s apparently a myth that shipping costs are solely responsible for the high prices. “It’s more expensive to ship from California to the East Coast using rail,” economist Lawrence Boyd of the University of Hawaii Center for Labor Education Research, told Hawaii News Now, “than it is to ship here using water.”

One shipping-related issue, though, does have an effect: The state’s hot, humid climate often causes imported food to spoil upon arrival while it’s still in its cargo containers. As much as a third of the food waste in Hawaii is due to food that has gone bad before it reaches the consumer — which means that importers and producers have to figure a substantial loss into what they charge.

Another key factor is the price of electricity, which is far more expensive in Hawaii than in any other state. A kilowatt hour of power costs twice what it does in Alaska, the next most expensive state for electricity, and is more than three times the national average. Experts say lower energy prices would lead to lower grocery prices, presumably because producers and merchants would be able to lower their own expenses and pass the savings along.

Money isn’t everything, however. With its low rates of obesity, unemployment, and poverty and an active community life, Hawaii is considered America’s happiest state — despite the cost of milk and eggs.