Did anyone in the White House read it at the time?
How many times is this administration going to find itself surprised by supply-chain issues? They dropped nearly $2 trillion last year on COVID relief amid a supply crunch, then were stunned that the whole country being flush with cash while goods are scarce might cause prices to rise. Now they’re figuring out that when a major baby-formula manufacturing plant got shut down three months ago at a moment when formula was already hard to find, a serious shortage might result.
Is seeing one move ahead on the chessboard too much to ask?
BIDEN: “If we had been better mind readers, I guess we could’ve” taken action to address the baby formula crisis sooner.
Biden hadn’t said ONE WORD in public about this crisis until today. pic.twitter.com/w3KFLd3kOO
— RNC Research (@RNCResearch) May 13, 2022
Ed pointed out on Twitter that the Washington Post and the Journal were running stories about stores rationing baby formula fully a month ago. What has the crack Biden economic team been doing about it since then?
“Fair enough,” you might say, “but you have to admit there was no way the White House could have anticipated Abbott’s baby-formula factory in Michigan being shut down in February.” Actually, there was a way. Bloomberg revealed yesterday that the FDA had concerns about possible contamination at the plant in September of last year.
The FDA report obtained by Bloomberg News through a freedom of information request shows that during a routine visit to Abbott’s Sturgis, Michigan, manufacturing facility in September, inspectors determined that employees may have transferred contaminants including deadly cronobacter from surfaces to baby formula. In one instance, the report said, records showed Abbott detected cronobacter in a finished batch of formula that may have been tainted by a worker who touched a contaminated surface without changing gloves. That batch wasn’t distributed.
If a meaningful share of the U.S. baby-formula supply runs through a single plant and safety concerns at that plant are raised, portending a future recall, that might be a moment to worry preemptively about a potential formula shortage, no?
The story of the shortage is mostly a story about counterproductive federal regulations, however. The supply of formula was disrupted repeatedly during the pandemic due to sudden spikes and drop-offs in demand, writes Derek Thompson. Parents hoarded formula in the early days of COVID, causing companies to surge production. Then, as the initial phase of the outbreak began to ease, parents began working through their stockpiles, leading to a decline in demand and a production slowdown. Then births began to tick up again, generating new demand. Once again manufacturers were left scrambling to keep up. That explains the “baseline” shortage in January, I believe, before the Abbott shutdown cut domestic supply further and threw the country into crisis.
What takes this from bad to unforgivable are the FDA regulations that have made European baby formula hard to get in the U.S. Read Elizabeth Nolan Brown’s thread for some of the most depressing nuances. One specious claim is that European formula isn’t as nutritious as American formula when in some ways it’s actually more nutritious:
European baby formula is also more likely to be organic, derived from grass-fed cows, & made w/milk fat (as opposed to plant-based fats). There are also more goat-milk based and “gentle” options sold there than there are here.
— Elizabeth Nolan Brown (@ENBrown) May 13, 2022
One study flagged by Brown found that 15 of 16 European formulas tested met the FDA’s standards. Even if they hadn’t, no doubt many American parents would surely prefer to have an abundant supply of almost-as-good European formula to keep their babies fed for the next two months while Abbott’s plant gets back on line and up to speed. And hey, at least they don’t have to worry about the European formula being contaminated with bacteria. Domestic production isn’t always higher quality, after all.
Another obstacle is labeling. Yes, really: Some formulas are off the market here not because of what’s in them but because their labels aren’t up to FDA snuff. Eric Boehm cites a case last year of the FDA recalling more than 75,000 units of German formula because the package neglected to say that the product contained less than one milligram of iron per 100 calories.
On top of all that, American parents are bedeviled by protectionism. Once foreign imports of baby formula cross a certain threshold, tariffs kick in that render the products unprofitable, choking off supply. Meanwhile, Thompson notes that the Department of Agriculture is the largest single purchaser of baby formula in the U.S. but limits its contracts to a small number of American manufacturers, one of which is Abbott. If the department were more diversified — if it purchased from Canadian manufacturers as well, for instance — then one supplier going offline wouldn’t create such a shock.
Biden and the FDA could have moved quickly to ease some of the regulations as soon as they heard of problems at the Abbott plant, anticipating the shortage to come. As it is, they’re playing catch-up. The FDA is promising action soon but without specifics:
US Food and Drug Administration Commissioner Dr. Robert Califf also said that the FDA is “working around the clock” to get more formula to shelves and will announce plans next week to streamline formula imports. Though the commissioner didn’t indicate exactly when formula stock would return to normal, he wrote that the new and ongoing steps “will help dramatically improve the supply in the U.S. in a matter of weeks.”
What’s stopping the White House from lifting the tariffs tomorrow? What’s stopping the FDA from waiving the labeling restrictions, however temporarily? Ron Klain said this week that they’re considering using the Defense Production Act to boost domestic supply of formula but regulatory action to reduce barriers to trade would doubtless solve the problem more quickly. What’s the hold up? I’m sure European formula manufacturers are eager to make a buck here.
Here’s Biden’s new video showing him doing nothing particularly productive.
I know families across the country are worried about the availability of infant formula. That’s why yesterday, I brought together manufacturers to discuss how we can increase supply as soon as possible. pic.twitter.com/i11qO423bQ
— President Biden (@POTUS) May 13, 2022