The Baby Formula Crisis: Problems with Panic and Manufacturing
In the last few weeks America has undergone one of its seemingly never-ending shortage crises that has enveloped the economic sector in the last two years. From toilet paper, to cleaning supplies, and now to baby formula the American stockpile seems to continuously be struggling to maintain stability. While this certainly is not just an American issue as the pandemic brought on major shortages and shortfalls in every manufacturing sector since it began, America is unique because this is a new problem that individuals have not faced before. Not having what you want when you want it is not a common American problem, so when this happens, people panic buy.
The largest baby formula manufacturing plant, Abbott Labs located in Illinois was recently shut down due a major bacteria contamination in the plant. Back in February huge quantities of baby formula were recalled after investigation by the Food and Drug Administration connected a rare bacterium in infants who were given the product. This led to four infants getting sick, two of whom died. As in all cases like this, the plant being the possible common denominator in the sickness it had to be closed for 6 weeks while the FDA conducted a thorough investigation which turned up no indication of the bacteria in the formula producing areas themselves but elsewhere in the plant. This turned out to not be the only health violation as the plant itself had water on the floors and employees not following the proper sanitization protocols. Due to these issues the plant remains closed as the FDA prepares safety reports that are regulated by the Federal Government and legally have to be adhered to before the plant can reopen, crisis or not.
While this does not mean the plant is not responsible for the deaths, it also does not mean they are not or will not be held responsible. Due to the fact that there is an ongoing investigation into the matter it means that the plant is currently not allowed to manufacture and sell products legally in the United States. Since this particular plant produces a significant portion of the needed baby formula within the country this sudden loss of product has led to major shortfalls everywhere that sells it. It is worth noting that this is not the only Abbott plant that produces baby formula, nor will these cease production, but the Illinois plant is the largest and most important manufacturing plan.
Due to this shortfall the overall amount of baby formula in the United States has rapidly dropped as long lines around stores have led parents to panic. While this is absolutely justified as feeding your child has to be a top priority as a parent, the panic induced by the media as well as the market has played a large role in this. In the United States whenever a large and absolutely necessary product is threatened the consumers have tendencies to make the shortfalls even worse by panic buying up products. This causes the supply to shrink with an increased demand as normal people begin to fall into the sinkhole of panic buying. Through this a strangulation of the suppliers as more people buy more with less product available it cuts out the normal people who do not panic buy from the market. We saw this at the beginning of the pandemic with toilet paper, but now this is significantly more serious as it could cost lives.
The big question as always is how is the government currently handling it, and how will they handle this going forward? At first the usual, the Republicans blamed the Democrats and vice versa and the federal government did very little. The FDA had made statements that they are trying to ease the process to rapidly allow international baby formula manufacturers to import their products to the United States to make up these shortfalls while Abbott prepares to open their plant again, which could be up to 10 weeks. President Biden this Wednesday invoked the Defense Production Act, forcing manufacturers to prioritize fulfilling distributors orders before anyone else. According to the FEMA website (Federal Emergency Management Agency), this act is meant to allow the president to force manufacturing it times of emergency to do what the government orders for the purpose of national interest and defense; learn more here.
The efforts of the Defense Production Act to manufacture locally has been combined with the Department of Defense’s aircraft to rapidly supply the country with foreign made products. This solution has been named by Biden as “Operation Fly Formula” as the DOD and FDA are set to find and rapidly deliver international formula that meets the national standards that all manufacturers who sell in the U.S. are held to. Congress as well has taken measures to assist the most vulnerable during this time by allowing them to use vouchers from multiple manufactures instead of the former limitations placed upon them. Another bill is set to be put forward in Congress with a significantly weaker likelihood of passing that would expand the budget of the FDA to be able to handle this problem. Senate Republicans have said that this bill would only expand the size of the FDA without actually addressing the problem although it seems that this money is intended to help out with the multi-pronged approach the Biden administration is attempting to use.
How long this crisis will last is unsure, but it is clear that the government is finally using its resources to try and alleviate the problem. Another issue that has been raised is the danger of allowing a singular plant in the United States to hold onto too much domestic production and control of the market. Should this singular plant again have issues with safety, there would be no way to produce enough baby formula domestically in the long term to cover even the most basic needs of the American children.