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Egg prices are falling after five months of price hikes

Inflation cools as Fed weighs interest rates
Consumer Price Index shows inflation cooling; Fed to decide on interest rate hike next week 03:32

Egg prices are tumbling after five months of price hikes that drove some consumers to smuggle cheaper eggs from Mexico.

Prices fell 6.7% in February, according to Consumer Price Index data released Tuesday. That comes after egg prices jumped each month starting in October, pushing the average price of a dozen Grade A eggs from $2.90 in September to $4.82 in January, according to figures from the Federal Reserve Bank of St. Louis. 

With February's price drop, the cost of a dozen eggs declined to $4.21.

Even though prices are easing, shoppers are still paying 55% more for a dozen eggs than they did a year earlier, partly due to an avian flu epidemic. Tens of millions of egg-laying hens have been slaughtered in what has become the deadliest bird flu outbreak in U.S. history, which has limited egg supplies and pushed prices higher.

With eggs still relatively costly, Dollar Tree has halted egg sales in its Dollar Tree stores, with the chain not expecting to bring back the food item until this fall, according to Reuters. 

That decision comes ahead of the spring holidays of Easter and Passover, when consumers tend to buy more eggs. But grocers are cautious about Easter demand this year because of concerns that still-high prices could dampen demand, according to a U.S. Department of Agriculture analysis of egg prices. 

Meanwhile, grocery stores aren't discounting eggs because they "are content to keep eggs on the shelf moving through normal attrition," the USDA analysis found.

The avian flu outbreak has infected more than 58.5 million birds across 791 flocks in 14 states as of Tuesday, according to USDA data. Because infected birds must be slaughtered, the outbreak has been a major factor in higher egg prices.

It's not only egg prices that are hitting pocketbooks. Rising food costs have continued to crimp household budgets in recent months. Grocery prices jumped by an annual rate of 10.2% in February, with costs for items ranging from frozen fruits and vegetables to ham climbing last month, the CPI data shows. 

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