Watch for Another Baby Formula Crisis

Nearly a year after infant formula shortages first sent American parents scrambling to ensure they could feed their babies, a key measure that helped relieve the crisis — the suspension of tariffs on foreign formula imports — is set to expire January 1.As a result, expect the price of imported formula to rise and the already tenuous domestic formula supply to again come under stress. More important, though, is the impact this will have on American babies, 75 percent of whom rely on formula for survival after six months of age, according to the Centers for Disease Control and Prevention.“Just as American store shelves are returning to some semblance of supply normalcy — thanks in no small part to the emergency liberalization of multiple U.S. restrictions on European and other foreign‐made formula products,” writes an economist at the Cato Institute, Scott Lincicome, “the federal government appears ready to reapply high, potentially prohibitive, taxes on the very imports that helped save the day.”Those who don’t have infants have likely forgotten about the formula shortages, save for reminders such as seeing formula canisters now tucked behind counters next to the cigarettes at some grocery stores. Yet the crisis never fully went away, with spot shortages continuing and price increases taxing parents. On Thursday, columnist Bethany Mandel tweeted that she was having trouble finding formula for her newborn as she waited for her breastmilk to come in. “Strange to be living the shortage after talking about it so much,” she wrote. “There’s a million reasons why parents need formula, and it’s crazy to me that there’s still a shortage this many months later.”The instigating event that sparked the baby formula shortages was the Abbott Nutrition recall and subsequent closure of its Sturgis, Michigan, plant in February, after two infants died from bacterial infections suspected from formula contamination. The Sturgis plant produced roughly 20 percent of all U.S. formula and exclusively produced many specialty metabolic formulas that are crucial for infants with health issues. Several infants were hospitalized as a result of parents not being able to gain access to these formulas.Before the Abbott shutdown, four formula companies accounted for more than 90 percent of all sales in the United States. The plant closure and subsequent shortages exposed systemic problems with the U.S. infant formula market, from tariffs and onerous regulations on imports that limited choice to monopolistic state contracts — of which Abbott held a majority— that decreed what brand of formula low-income parents could purchase through the Special Supplemental Nutrition Program for Women, Infants, and Children. Roughly 50 percent of all U.S. formula sales are subsidized by WIC.One major plant closure, and the deck of cards fell. By late May, at its worst, the out-of-stock rate for formula reached 74 percent nationally and 90 percent in several states. Parents started Facebook groups to post updates on what stores had supplies in stock and shared recipes for homemade formula, which the FDA condemned as posing serious health risks to infants. The American Academy of Pediatrics also temporarily suspended its recommendation that babies under 1 year of age not be fed cow’s milk. Major retailers like CVS and Walgreens began limiting the amount of formula parents could purchase in a single visit.The Biden administration was widely criticized for its slow response. In May, President Biden invoked the Defense Production Act to speed up formula manufacture and announced “Operation Fly Formula” to boost formula supplies from Europe. Mr. Lancicome calls the latter “more a photo op than a real improvement in the domestic supply situation but still a very visible acknowledgement of imports’ value (and protectionism’s problems, especially when crisis hits).”The FDA, in its most significant action, fast-tracked the temporary approval of several foreign formula brands for import. In July, Congress passed the Formula Act, which suspended tariffs on these imports until the end of the year. The FDA later extended the temporary authorization of approved formula imports through 2025, yet the tariff suspension is about to end.Big Dairy is lobbying hard for Congress not to extend the lifting of tariffs, despite the real demand from American parents for imported formulas, the price for which will increase by as much as 25 percent when the tariffs are reinstated.“Given that the temporary production shortfall that gripped American families in need of formula earlier this year has abated,” a November 17 letter to Congress from the National Milk Producers Federation reads, “we respectfully request your opposition to any effort to extend these preferential tariff benefits beyond the end of this year.”Parents don’t have this same lobbying apparatus. Come January, though, they will likely be feeling the impact of congressional inaction on their pocketbooks.A mother in Maine, Sarah Grogan, whom the Sun interviewed last spring about the formula shortage’s impact on her family, says she stopped feeding formula to her baby in August in large part because of the rising cost. “We stopped slightly sooner than recommended because the price of formula had increased several times, and that was a name brand we had to buy because the generic brands were still not consistently on the shelf,” she told the Sun. Now, there are also shortages of children’s Tylenol and cold medicine. Walk the cold medicine aisle of most pharmacies and they look like the toilet paper aisles of 2020, with the children’s medicine sections the emptiest. In a statement to the Sun, Johnson & Johnson Consumer Health cites “high consumer demand driven by an extremely challenging cold and flu season” for the empty shelves. Parents of small children want a break. Yet the January 1 reinstatement of tariffs on baby formula will only further limit choice, increase prices, and hurt American families.

Watch for Another Baby Formula Crisis

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