Three factors are driving the U.S. baby-formula shortage: bacteria, a virus, and a trade policy.
First, the bacteria. After the recent deaths of at least two infants from a rare infection, the Food and Drug Administration investigated Abbott, a major producer of infant formula, and discovered traces of the pathogen Cronobacter sakazakii in a Michigan plant. As a result, the FDA recalled several brands of formula, and parents were advised to not buy or use some formula tied to the plant…
That brings us to the second cause: the virus. The pandemic has snarled all sorts of supply chains, but I can’t think of a market it’s yanked around more than infant formula. “During the spring of 2020, formula sales rocketed upwards as people stockpiled formula just like they stockpiled toilet paper,” Lyman Stone, the director of research at the consulting firm Demographic Intelligence, told me. Then, as “families worked through their stockpiles, sales fell a lot. This oscillation made planning for production extremely difficult. It was complicated to get an idea of the actual market size.” Meanwhile, Stone’s research has found that an uptick in births in early 2022 has corresponded with a “very dramatic decline in rates of breastfeeding” among new mothers, which pushed up demand for formula once again…
Finally, the third factor: America’s regulatory and trade policy. And while that might not sound as interesting to most people as bacteria and viruses, it might be the most important part of the story.
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