Business Intelligence

Business Intelligence

A growing industry? Farms up 30 percent between 2012 and 2017
The number of farming operations in Alaska is increasing, and a good part of the growth is in smaller greenhouse operations supporting bedding plants and flowers as well as vegetables along with the non- profit hatcheries and mariculture operations like oyster farms that are mostly family-owned. Mariculture and hatcheries are included with conventional farms in U.S. Department of Agriculture data. According to the latest USDA farm census for Alaska the number of farms operating in Alaska increased from 762 in 2012 to 990 in 2017, a 29.9 percent growth. Growth occurred across the traditional farming areas, with farms in Southcentral Alaska, which includes Mat-Su, increasing from 291 in 2012 to 350 in 2017; Interior Alaska, increasing from 217 in 2012 to 274 in 2017, and the Kenai Peninsula, increasing from 162 to 260 over the same period. USDA considers any place that produces $1,000 or more of agricultural products for sale during a year.
Supporters of agriculture are using the new data to show officials in Gov. Mike Dunleavy’s administration that farming, though small, is viable and growing and adding to private sector activity. State budget officials have attempted to cut programs that support farming. Legislators are pushing back.

Influential anchorage business group focuses on food supply
In a related development, Commonwealth North, the Anchorage-based business group that works on public policy, has formed a task force to work on “food security” issues, which includes promotion of agriculture and its related infrastructure in the state. This is significant because it will focus the attention of leaders of the group, which include Anchorage’s business elite, on supporting agriculture and locally-grown food.

Bristol bay subsidiary expands in western Alaska fuel supply Bristol Alliance Fuels, a subsidiary of Bristol Bay Industrial and Bristol Bay Native Corp., has assumed management of Delta Western’s fueling operations in Dillingham and Naknek effective April 16. This is a lease/ operation agreement with Delta Western still owning the facilities and being the exclusive provider of fuels for Bristol Alliance Fuels. Bristol Bay Industrial is a major provider of industrial and oilfield services in Alaska. Delta Western is a member of the Saltchuk family of companies that operate in Alaska.

Fairbanks will raise taxes due to governor’s cuts
Fairbanks North Star Borough officials are proposing a property tax hike of 1.6 mills to cover additional debt service on school bonds, assuming that Gov. Mike Dunleavy’s proposed cutoff of state school bond support is approved by the Legislature. The state House, however, approved a 50 percent reduction, half of what Dunleavy proposes The state Senate has yet to make its recommendation. House and Senate budget differences will be resolved in a conference committee but the governor is still expected to cut using his veto. Many municipalities are making plans assuming the governor’s cuts will prevail. The tax hike could cover a projected $9 million shortfall from reduced state funds but officials also want to put $10 mil- lion into a facilities maintenance fund, which now has about $10 million.

Some anchorage businesses still shuttered due to earthquake Some Anchorage businesses including the Westmark Hotel in downtown Anchorage are still closed or with operations curtailed due to damage from the Nov. 30 earthquake, Anchorage Daily News reporter Annie Zak reported. Local TV station KTVA had to temporarily relocate from its building in east Anchorage while the building undergoes extensive repairs. About 60 Anchorage commercial buildings are still restricted for occupancy, municipal officials report.

Permanent fund education raffle raises almost $1 million for schools
Alaska’s new Permanent Fund education raffle is off to a great start, with $976,400 pledged in this first year of the program. Half of the money will go to support the state’s K-12 school funding and a quarter to a new education endowment. The rest goes to a fund to pay for raffle prizes. Sen. Click Bishop, R-Fairbanks, sponsored the bill creating the raffle, under which Alaskans can use their annual Permanent Fund Dividend to buy raffle tickets. The first raffle drawing, for prizes, is set for January 2020.

Major cruise operator carnival in trouble over ship pollution Carnival Corp., a major owner of cruise ships operating in Alaska, is in trouble with U.S. courts over alleged violations of environmental rules and terms of a probation agreement. Violations cited include the dumping of 26,000 gallons of “gray” water, which is partly treated, into waters in Glacier Bay National Park in Sept. 2018. The company paid a fine to the state of Alaska. U.S. District Judge Patricia Seitz, in Miami, is considering whether to ban the company from U.S. ports because of continued violations, which may affect Carnival’s operations in Alaska.

Anchorage land prices still high for industrial space development
Prices for industrial land in the Anchorage bowl area are averaging between $12 and $20 per square foot, while construction costs for a typical warehouse ranges between 85 cents and $1.25 per square foot, writes Brandon Spoerhase, broker for BSI Commercial Real Estate, in an Anchorage Daily News column. The new construction lease rate averages about $1.35 per square foot, which results in a loss under a conventional investor scenario. However, most industrial developers are owner-users who will not look at the project as a conventional real estate deal, so site and building costs are built into a company’s overall finances. Still, the lack of available industrial land in Anchorage is causing developers to look more at Eagle River and the Mat-Su region where land costs are lower, Spoerhase wrote.

Alaskans carry more debt, but fewer educational loans
Alaskans carry more debt than the average American, according the First Reserve Bank of New York. As of the fourth quarter of 2018 Alaskans’ total debt per capita was $58,550 compared with $50,000 per capita for the U.S. as a whole. It was only in average student debt that Alaskans were lower, at $4,030 per capita average com- pared with $5,390 average for the U.S. The statistic is telling in that it indicates that Alaskans on aver- age are below the nation in pursuing post-secondary education and training, which fits with information gathered by the University of Alaska. The data is in a report from the University of Alaska’s Institute of Social and Economic Research published in a First National Bank Alaska’s quarterly newsletter.

PFD pledges to charities reach $2.9 million this year
Alaskans’ pledges to charities this year through the “Pick, Click, Give” feature on the Permanent Fund Dividend application were $2.9 million as of the March 31 PFD application deadline. That’s up from $2.5 million in 2018 and $2.7 mil- lion in 2017. The high years for “Pick, Click and Give” were 2015 and 2016 with amounts raised being $3.3 million in 2015 and $3.1 million in 2016. The average pledge per donor in 2019 was $113.88. The program channels donations to 628 participating nonprofits in areas like youth and education; emergency services; humanitarian efforts; animals; arts and culture. and health and community organizations.

The total for 2019 may increase because PFD applicants actually have until August 31 to add to their donations, even though March 31 is the deadline for the application. Given the state budget uncertain- ties this year nonprofits are likely marketing to get people to increase their contributions. In the past there has not been any significant increases in donated amounts between March 31 and August 31 but this year may be different. The big question for 2019 is how big the PFD will be, of course. Gov. Mike Dunleavy is pushing for a $3,000 PFD but legislators think the amount should be lower so that there will be more money available for state programs, and budgets won’t have to be cut as drastically.

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