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It’s a commonly asked question these days: How does one of the richest countries in the world have a baby formula shortage?
And, more important for families scrambling to find formula to feed their babies, how can this problem be quickly rectified?
The quick answer to how this happened is economics, which have been complicated by the coronavirus pandemic. Because of declining birth rates in the U.S. and the stringent regulation of baby formula, which is the only source of nutrition for many infants, the formula market is not especially lucrative and there was not a lot of incentive for new companies to enter it. The American baby formula market is dominated by just three companies.
But, as Atlantic writer Derek Thomas explained, the market changed in 2020, when COVID hit the U.S. First, many families stocked up on formula, along with toilet paper and other necessities, thereby driving up demand. But, when the virus looked more manageable, demand for formula plummeted. More recently, there has been an uptick in births that was accompanied by a drop in mothers who breastfed, Thomas reported. Demand for formula shot up again.
This seesaw in demand was complicated by supply chain disruptions that have hit many industries. Then, in February there were reports of contamination at a formula plant in Michigan.
Abbott Nutrition, a branch of Abbott Laboratories, which also makes COVID test kits, shut down a formula factory in Michigan in February. The shutdown, which followed a voluntary recall of formula made there, came after reports that five infants became ill from a bacterial infection after consuming formula. Two infants died
On Monday, the Food and Drug Administration and Abbott Nutrition reached an agreement on reopening the plant in Sturgis, Michigan, but the company said it could take months for formula made there to reach store shelves.
The federal government, especially the FDA, shares some of the blame. The agency was slow to respond to whistleblower complaints about problems at the plant, Fortune reported.
The U.S. also has tight import restrictions on formula, which has made it difficult to import formula to make up for the shortage caused by the closure of the Abbott plant. Abbott has increased production at other U.S. facilities and other companies have also upped their output.
The White House says it is moving quickly to approve new types of formula from both international and domestic suppliers. Invocation of the Defense Production Act has also been mentioned. This would be an extreme step that may come too late for families that are desperately searching – now – for formula.
The U.S. Department of Agriculture’s Supplemental Nutrition Women and Infants, and Children program, commonly called WIC, is the largest buyer of infant formula in the U.S. The program, which offers nutrition support to pregnant and new mothers and their children, provides food and vouchers for specific food items, along with other nutritional support. By awarding contracts to just a few formula companies, the USDA contributed to the concentration of the industry, a policy that should be reconsidered given current events. Because of the current shortage, WIC recipients in Maine are allowed to purchase other brands of formula that are not typically included in the program.
Rep. Chellie Pingree signed onto a letter sent to the White House on Tuesday encouraging more be done to ease the shortage.
“The federal government must do everything in its power to alleviate product shortages and ensure distribution is equitable and does not trigger scarcity pricing surges,” the 150 House members wrote. “We cannot let product shortages come between the decisions made by parents and pediatricians on how to best feed their children.”
They pushed the administration to review warning signs that may have been missed prior to the recall and supply chain issues that contributed to the shortage.
These are all important steps. But, this concerning shortage is another reminder that relying too heavily on market forces to meet our needs, especially needs for vital sustenance like infant formula, can be a risky choice.