NEW YORK (Yaakov M / VINnews) — What caused the baby formula shortage?
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The short answer is, the government. (In fact the Washington Examiner calls it “Biden’s formula shortage”.)
Some have tried to blame COVID and the supply chain, which are convenient scapegoats. However other products (though overpriced) are not experiencing a shortage, so blaming the supply chain does not suffice.
The FDA created the shortage by:
- Shutting down a huge formula plant for months
- Banning European baby formula
- Not letting anyone know until it was too late
In addition, the government has turned the formula industry into essentially a monopoly, because the WIC program only allows mothers to purchase one brand of formula in each state.
The Background:
Free-market capitalism works. If a product is in demand, private companies will produce it, motivated by profits. We learned this simple theory in elementary school, and it really does work.
But when the government interferes, it can mess things up.
In February, the FDA shut down Abbott labs’ Michigan plant and issued a recall of its formula. Abbott is the number one supplier of baby formula in the U.S.
Whether or not that shutdown was justified, the FDA was aware 8 months ago that Abbott labs had problems. Then in February, when the plant was shut down, the FDA should have known that the market would be strained. Yet they did not take steps to avert a shortage or increase the supply of formula from another source.
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What other formula options were available?
A very simple option would have been the solution the government has finally tapped into now, albeit far too late.
European baby formula.
Astonishingly, the FDA has a ban on much of the baby formula produced in Europe. There is no danger or health risk, it is purely a labeling issue. (After all, you don’t hear about European babies keeling over or having bad reactions to formula. If anything, European formula is more natural and might even be healthier.)
European brands don’t list the “nutrition facts” in accordance with FDA regulations. Also, their labels are usually not in English
We can debate whether those restrictions make sense in general, but after a giant lab was shut down, it’s a no-brainer that the ban should have been lifted.
(The FDA is allowing Abbott to reopen that plant in just a matter of days, which means that they probably could have figured out a solution long ago. But government agencies are usually not in a rush to solve problems.)
Why are there so few baby formula companies in the U.S.?
It turns out that each state has one main supplier of baby formula. It is an artificial monopoly that was created by–you guessed it. The government.
WIC benefits only allow mothers to buy one brand of baby formula in each state. The company that has the lowest bid wins the jackpot. WIC covers about ⅔ of the total baby formula purchased in the country. That crushes out the competition.
Once again, capitalism, free market, supply and demand, and competition work.
The government creates the mess, and that is exactly what caused the “Biden baby formula shortage.”
Yaakov M is a senior columnist for VIN News and former Op-Ed columnist for Newsmax. He has hosted a conservative podcast for 15 years. He studied in Kollel for 14 years, was a Bais Medrash Rebbi for over a decade, and obtained semicha from a top Rosh Yeshiva.
What’s there to explain ? Look who Is running the country it only will get worse…this is a broken administration who cannot govern ……..):
Don’t worry, the House voted to give the FDA $28,000,000 to think of a plan to solve the crisis! I’m sure that will fix everything.
It is a deliberate plan to create chaos abd kill the USA. All planned out. Open your eyes and see
My baby was on European formula, paid by WIC since way before this shortage became public knowledge.
Let me explain why you are wrong:
“Yet they did not take steps to avert a shortage or increase the supply of formula from another source.”
It is not the FDAs job take those steps and, in fact, cannot do so. The FDA doesn’t operate plants so it can’t increase the supply–that is handled by the market. Also, typically, the FDA doesn’t notify other manufacturers of a pending closure. Usually enforcement decisions are kept private because the manufacturers themselves don’t want that information to be released.
European formula may be great but that doesn’t necessarily mean they meet statutory requirements, i.e. laws that Congress wrote. At best, he FDA may be able to waive some labeling requirements if a company applies.
As for WIC, it’s not as simple as “crushing the competition” because there are still 50 states but WIC is not the only reason for extreme market consolidation.
I think “the government” existed before Biden. Didn’t it?