Why We Can't Have Nice Things: The Great Baby Formula Shortage of 2022
A combination of "absurdly high" federal tariffs and excessive FDA regulations created the conditions for a crisis.
"When you walk into the store and there you don't see that packaging…you start to panic," says Kenzie Jaicomo, a new mom whose child was just a few months old when a sudden shortage of baby formula hit the United States last year.
"What am I going to feed my baby?" she remembers thinking, staring at an empty shelf in a neighborhood grocery store.
In the first episode of Why We Can't Have Nice Things, a new podcast series from Reason, we're diving into the causes and consequences of last year's baby formula shortage. Though it was a crisis kicked off by unexpected supply chain issues and contamination problems at a major production facility in Michigan, the roots of the shortage ran straight through Washington, D.C., where poor government policy left American infants hungry and their parents scrambling.
With domestic supply chains snarled, it would have made sense for American grocery stores to turn to foreign producers for replacement supplies of baby formula. Unfortunately, there are "absurdly high" tariffs on imported formula, explains Gabriella Beaumont-Smith, a trade policy analyst at the Cato Institute.
"There are these distribution channels that are basically not established" because the tariffs make it too costly, she says. "And we're talking about baby formula. This is a necessity and we shouldn't be taxing it that high or at all."
It took last year's crisis for Congress to consider lifting those tariffs—and only on a temporary basis. The dairy lobby and other special interests like the isolated, and fragile, American market for baby formula just the way it is.
On this week's episode of Why We Can't Have Nice Things, we'll explain how this crisis unfolded, why the government's efforts to alleviate the shortage mostly failed, and ask whether a free market might have done a better job. Spoiler alert: It would have.
Further reading/viewing for this week's episode:
"Formula for a Crisis," by Scott Lincicome, Beaumont‐Smith, and Alfredo Carrillo Obregon
"My Baby Needed Special Formula From Europe. U.S. Trade Policy Made It Almost Unobtainable," by Kelli Pierce
"The Government Hasn't Learned a Thing From the Baby Formula Shortage," by Emma Camp
"FDA Finally Admits It Caused the Baby Formula Shortage," by Eric Boehm
"The Mystery of the Missing Baby Formula," by ReasonTV
Written by Eric Boehm; produced and edited by Hunt Beaty; additional editing by Ian Keyser. Additional mixing by Luke Allen. Fact-checking by Katherine Sypher.
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Trump defenders in the comments said that tariffs had absolutely nothing to do with it, so anyone who claims otherwise is a leftist.
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As part of the multinational trade agreement signed during Mr Trump’s final year in office, a new wave of red tape was added to the process of importing baby formula produced in Canada, one of the products specifically restricted by the trade agreement. Tariffs on Canadian infant formula are high, around 17 per cent, and that tariff is required under the USMCA to increase further if exports reach a certain level.
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“[T]he provisions in the USMCA’s agriculture annex establish confusing and costly [tariff rate quotas] on Canadian exports of infant formula, and the United States imported no baby formula from Canada in 2021,” the Cato Institute noted last week, adding that companies will have little incentive to change that unless some of those restrictions and red tape is removed.
DREAMY LIBERTARIAN!
https://www.independent.co.uk/news/world/americas/us-politics/donald-trump-baby-formula-shortage-b2084274.html
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If it comes from the Cato Institute, you know it’s a lie.
This was a really stupid policy that long predates Trump. He isn’t responsible for every bad federal policy. This is another example where the nutty far left and the insane far right are no different from each other. They both want to “protect” industries that have political power. Bernie Sanders is the biggest advocate for the dairy lobby and he now has enough seniority to matter. Never mind the the poor people he claims to care about suffer. Trump should pick him as his running mate.
Parents will spend double the price for food. But imports weren’t allowed to be processed due to labeling. Non idiots understand the issue had to deal with imports and not price. But then again youre a fucking idiot, so there’s that.
A tariff literally doesn’t effect product pricing if the product isn’t even allowed into the country dumbass.
“we’re diving into the causes and consequences of last year’s baby formula shortage”
Causes: Federal government malarkey.
Consequences: More Federal government malarkey.
If only humans had a process for feeding infants that didn’t involve commerce – – – – – –
and just how is my trans niece supposed to feed her baby? which I’m told is totes possible.
This can never be a problem, because men can’t have babies.
(“they” lied to you about that whole ‘delusional men can have babies thing’)
There are some women (actual XX-chromosome women with no surgical or hormonal modifications) that cannot breastfeed, either because of insufficient milk production or because an illness or it’s treatment makes it unsafe for the baby. There are also adoptive mothers who produce no milk because they didn’t go through a pregnancy. But the main problem is the mothers who could have breastfed, but chose not to. Their milk production shut down after a few weeks of not being used, and now they _cannot_ breastfeed.
A shortage of infant formula is a huge problem for all of these mothers and their babies.
Welcome to the 20th Century!!
Although most women can start lactation themselves with a breast-pump for a short period of time, not all of them can. Thanks to cutting edge research and medical advances, modern 1960s women who adopt –or declined to initially nurse– a baby can see a physician to get supplements, hormones, and medicine to “jumpstart” or restart their lactation.
Historically, there were also wet nurses: women who had lost their own babies and hired out to breast feed other babies. But that was generally possible only because of an appalling infant mortality rate, especially in the lower classes.
“Why We Can’t Have Nice Things” … government. That says it all. If you enjoy “delving into” the obvious, knock yourselves out! If you think making the obvious crystal clear to voters will change anything at the Federal government level, I hope you don’t let the disappointment ruin your day.
The reason that the government does this is that we elect politicians like Donald Trump who want to protect their favored special interests. Trump didn’t create these particular tariffs but he tried to expand them to dozens of other industries. And Biden didn’t immediately eliminate all of Trump’s stupid tariffs (and all of them were stupid) which is a blemish on Biden’s record. (And I am usually a Biden supporter.)
Biden loves tariffs. Please don’t try and pretend otherwise.
For an ailing Feinstein, a fight over the family fortune
Huh, so I guess the media is at least finally able to admit she’s ailing.
She is in better shape than Sens. Carter Glass, Theodore Green, and Karl Mundt were. At least she can make it to Senate sessions. None of them resigned.
A lot of senators should resign. Many should also take their own lives, as an act of contrition
All those babies needing formula we don’t have proves that abortion is more critical than ever.
You horrible person. Don’t you understand that it is more important to protect big corporate dairy farms than children who can’t nurse adequately for whatever reason. They dairy lobby is essential to funding political campaigns all over the United States. Where will Congressmen get the funds to pay for their campaign ads? How will the TV station owners pay their employees without the ad revenue? You want to destroy the economy to save babies’ lives? That is un-American! It is even more un-American than expanding Medicaid!!!
/sarcasm
Libertarian legislators in New Hampshire today passed a 700 % tariff on imports of Canadian infant squirrel and wolverine formula, and a 1,600 % levy on processed foods containing baby seal flippers.
Obviously a Strawman characture, since States don’t have Constitutional jurisdiction over trade with foreign nations and genuine Libertarians would never favor tarrifs imposed by anybody in any event.
Start again.
How did we feed infants before there was baby formula?
It sucked to be a baby then.
Before infant formula, many children died due to the lack of infant formula.
You are ignorant of recent history.
And you’re a condescending troll! Fuck Off, VendicarD!
To give a more tactful but straightforward answer, not all women are nourished enough themselves or otherwise capable of providing ample nourishment from breastfeeding, so formula is necessary.
To second the motion with Longtobefree, for the biggest bulk of human history, some 80 percent of pregnancies were stillborn and some 40 percent of infants didn’t live past age 1. Innovations like surgical hygiene, antiseptics, antibiotics, the discovery and production of vitamin supplements, are fairly recent in the past 100 years and made a big difference in these tragic numbers. And as long as governments stay the Hell out of the way, life can be better for infants and all of us.
Along with the medical advances you cite, other happened as well, including the ability to fortify or reverse mothers’ malnourishment …. if indeed “malnourished mothers” are any measurable fraction of those giving birth. Although a few women cannot nurse, artificially starting lactation is easy and routine for most.
Seems to me like this is the free market in action. “Absurdly high tariffs” is a nice sound bite, but what is the actual rate? The actual US rate is 17.5% for most countries. (See US Harmonized tariff schedule 1901.10.11). If a slightly different type under 1901.10.16, the rate is 14.9% + $1.035/kg imported. Not the 25% cited in the article. AND, the free trade agreements, including the Canada -US- Mexico agreement, and others, allow for duty-free entry of the items. (Some other countries may be subject to quotas, but that is something that importers just need to deal with. and Mexico is possibly excluded.) The UK, by comparison, charges 6% duty on formula, but also 20% VAT. The EU charges 7.6% at its border. So, perhaps US trade policy is NOT the ENTIRE problem here. The issue is the distributor and supplier network. Buyers / manufacturers (like ABBOTT and others) choose not to import much because there is a preference for the domestic supply. It is not just the dairy farmers. ABBOTT thrives on the so-called barriers to imported products as well. As for the other economic reasons, most things produced in Western European countries is more expensive compared to Asia and Eastern Europe. (Italian clothes are more expensive than Turkie.)
Do we really want the FDA easing restrictions? If one baby died, the FDA would be blamed. Why don’t we have encouragement for more domestic suppliers rather than worrying about removing tariffs? Why be beholden to foreign suppliers and supplies? Perhaps formula is another critical item (like semiconductors) that needs to be produced at home.
The actual issue is FDA requirements on labeling, not the tariffs. Foreign companies don’t want to eat the costs of changing manufacturing to meet FDA requirements, so they don’t export to the US. The tariff claims are just an ignorant hobby horse that gets added on.
https://fortune.com/2022/05/18/the-fda-could-easily-solve-the-baby-formula-shortage-by-allowing-more-imports-from-europe-march-furton/
Especially onerous are the FDA’s rigid labeling and nutritional requirements for formula containers, which prohibit the sale of many European-made products, even though the formulas themselves meet FDA nutritional and purity standards.
Idiots like sarc and boehm are too dumb to admit to the real issues because they prefer bumper sticker slogans.
As far as domestic suppliers… that is caused by WIC payment agreements that make up nearly 50% of baby formula purchases. Agreements made with set distributors.
There’s a couple of components, but this is basically a monopoly problem. And when you look at shortages in almost every instance, it’s usually because you have one or two or three suppliers of some vital good. And, oh, one of the factories, often they’re regulated. They’re not taking care of the factory. Then it goes out and gets shut down and boom, there’s a shortage. And that is what happened here.
“It’s also what underpins the pharmaceutical shortage. But basically this is a little more complicated. Because there are two aspects to the shortage. One is … Abbott Labs. Which is a $200 billion company. And domestic baby formula represents less than 5% of their revenue. So they don’t really care that much about this division. And their factory was a mess. They had old equipment. It was dirty. The FDA told them multiple times, You’ve got to clean this up. This is the factory that eventually the FDA said, okay, we’re shutting this factory down until you clean it up.
“There was an FDA inspection in September. They said, hey, you guys are wearing dirty shoes in the sterile rooms that make infant formula. Then a whistleblower said, look, they’re falsifying records. They’re not looking into consumer complaints when babies get sick. And then there was another inspection in January and February. And finally, the FDA just shut the factory down. And so that’s kind of problem one.