Addressing the Nation’s Infant Formula Crisis

Across the country, parents and other caregivers are frantically scrambling from store to store in search of formula for their infants and loved ones. The infant and specialty formula shortages that have resulted in empty grocery store shelves have collided with skyrocketing food prices to create a serious crisis. The deep fissures in the responsiveness and resilience of the U.S. food production and safety system have only been compounded by supply chain breakdowns and other economic challenges stemming from the COVID-19 pandemic.¹

Formula is essential to infants’ healthy growth and development as well as to the health and survival of people with certain disabilities and medically fragile individuals. Congress must respond to the urgency of this crisis and shore up formula supplies, strengthen the country’s safety net, and ensure accessibility for all who need it. While recent action by the Biden administration and Congress²—including taking important steps to address production and distribution challenges—has helped to address the immediate crisis,³ the Center for American Progress proposes several strategies that the federal government can implement in the short term to prevent future shortages and to build a more responsive, resilient, and safe food production and distribution system:

• Increase agency responsiveness on pandemic- and emergency-related issues.
• Reduce domestic market concentration to diversify production and boost the supply of infant and specialty formula.
• Increase imports from external markets to fortify supply and distribution efforts.
• Expand the pool of affordable formula products so individuals and families have steady and reliable access to food and nutrition.
• Reinforce the social safety net to protect women and children who are particularly vulnerable to shortages.
• Center the needs of marginalized communities when developing policy solutions, including low-income individuals and families, mothers, and people with disabilities, as well as LGBTQI+, foster, and adoptive parents, all of whom are particularly vulnerable to formula shortages.

While the formula crisis did not emerge overnight—a product of long-standing market concentration among four main production competitors—it is currently taking a heavy toll on parents and caregivers, especially single parents and guardians in low-wage jobs who were disproportionately affected by the pandemic and economic recession.⁴ Similarly, the shortage is severely affecting parents who do not breastfeed and individuals with disabilities or other health issues who rely on formula for their nutritional intake and survival.⁵ In addition, LGBTQI+, foster, and adoptive parents who rely on formula for their infants are hit hard by the shortages.⁶ This shortage has an impact on countless families: By the age of 3 months, fewer than half of all babies in the United States are exclusively breastfed—and in fact, 19 percent of infants receive some formula within the first two days of life.⁷ Clearly, this crisis touches families of all makeups and income levels across the country.

The production of infant and specialty formulas in the United States is especially vulnerable to shocks. Currently, there are only four primary domestic manufacturers, and the largest three produce about 98 percent of the formula purchased in the country.⁸ But what truly tipped the scales was the February 2022 closure of an Abbott Laboratories infant formula manufacturing plant in Michigan due to a bacterial contamination and other safety concerns, which resulted in the deaths of two infants.⁹ A prominent producer of specialized formula for infants and other medically fragile people with certain allergies, gastrointestinal conditions, and metabolic disorders, the closure of the Abbott plant has had dramatic ramifications for the broader supply of formula on the market:¹⁰ As of May, the out-of-stock percentage of infant formula has risen to 43 percent.¹¹

The present shortage exposes America’s flaws when it comes to supporting women, families, and other underserved communities, especially those with low incomes or struggling with financial precarity. Furthermore, the backlash from this crisis—with some asserting that parents should simply breastfeed¹²—reveals the enduring stigma around formula feeding and a lack of understanding of the needs of disparate populations who rely on formula.¹³ The formula crisis also highlights the shortcomings of the U.S. food production and distribution system, which can be brought to its knees by the closure of a single manufacturing facility, and underscores the fragility of national systems designed to prepare for and respond to public health threats.

There is no single solution for addressing the formula crisis, but attacking the challenges with supply, production, and access in a multipronged manner is required. It will take regulatory and legislative action to ensure that get critical infant and specialty formulas find their way back on shelves in a safe and expeditious manner, while strengthening the resilience and responsiveness of the nation’s food and nutrition system. This issue brief details the steps involved in this multipronged strategy.

The U.S. Food and Drug Administration (FDA) reportedly received notice of safety concerns at the Abbott plant in October 2021¹⁴—several months before the factory closed in February 2022, and before four infants were hospitalized with bacterial infections that proved fatal to two.¹⁵ The Senate has only recently convened a panel to investigate Abbott’s business practices and its focus on profits, which may have shaped its decisions about health practices in its infant formula facility.¹⁶ When it comes to ensuring that products are safe, affordable, and easily available across communities, strong government oversight is critical:

• Increase government oversight and quality controls of safe manufacturing practices at facilities that contract with federal government through regulatory and budgetary actions:
  • Provide federal agencies with the resources they need to boost inspections at food production plants.
  • Increase agency workforce investments to speedily respond to supply disruptions that could have grave consequences for consumers.
  • Provide federal agencies with resources they need to prepare for future public health challenges. For example, the FDA has requested funding within the fiscal year 2023 budget for food safety and nutrition modernization,¹⁷ including reducing exposure to harmful chemicals in food production and improving supply chain data collection.
• Promote greater collaboration between governmental agencies such as the U.S. Department of Agriculture (USDA), the FDA, and the U.S. Department of Health and Human Services (HHS) to ensure a coordinated, public-private response to infant formula recalls and supply disruptions.
  • For example, the U.S. Health Resources and Services Administration can support community health centers as formula distribution sites and can work with health care providers to assist parents and caregivers in finding alternative infant formula products.

The consolidation of infant formula production in the United States creates inherent risk to a system that so many individuals and families rely upon. The closure of the Abbott facility in Michigan was devastating to the entire country’s supply of infant formula, and without action, the risk of similar events will remain even after that plant is back up and running. Reducing market concentration and diversifying production to boost the supply of infant formula and prevent such shortages in the future are imperative:

• Increase formula supply in the short term by invoking the Defense Production Act¹⁸ to increase domestic supply, which will prioritize the delivery of needed ingredients to formula producers,¹⁹ as President Joe Biden has done. The Defense Production Act also allows the USDA and HHS to use commercial aircraft to pick up baby formula from other countries, easing the supply backlogs.²⁰ In fact, on May 22, the government did just this and flew in 70,000 pounds of baby formula from Germany.²¹
• Reduce the risk created by highly concentrated production of an essential good by encouraging antitrust enforcers to prevent additional consolidation and be vigilant of anti-competitive behavior by existing firms.
• Explore ways to encourage entry of new domestic suppliers.
• Consider whether the contracting process could be amended to encourage market entry without significantly reducing the support that contracts provide for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and participants. This is particularly important given the large share of infant formula purchased through WIC programs.²²

Reducing market consolidation can go a long way in ensuring that parents and caregivers have access to a diverse range of competitively priced formula products. Preventing supply shortages in the future is imperative to ensuring a stable and diverse market:

• Allow foreign producers of formula that meet FDA safety, nutrition, and other standards to enter the U.S. market. This could diversify supply and reduce risk.
• Streamline the entry review process for formula shipped from plants with favorable inspection records, which may provide some short-term help, as the FDA has done.²³ In the longer term, the federal government should consider making some version of expedited review permanent.
• Direct the FDA to actively identify a set of reliable foreign formula producers. Policymakers could examine whether changes in tariffs or other policies would incentivize their entry into the domestic market.

Preventing price gouging and enabling other companies to participate in the U.S. market is a critical step toward ensuring that families have stable and affordable access to a range of food and nutrition options. Loosening some of the government inflexibilities in benefit programs such as WIC can similarly ensure that parents and caregivers have access to a wider pool of products and alternatives:

• Loosen federal restrictions²⁴ on the types of formula that can be purchased with WIC benefits, which accounts for about half the infant formula sold in the United States²⁵ The government should also make these flexibilities permanent, as opposed to just taking effect during public health or other emergencies such as a recession, weather-related event, or supply chain disruptions.
• Ease WIC flexibility to ensure that eligible families can purchase a variety of formula brands in their communities.
• Direct the Federal Trade Commission (FTC) to work with state attorneys general to monitor formula price gouging by manufacturers and resellers, especially during times of emergencies and shortages.²⁶
• Direct the USDA to work with states and stores to keep a certain amount of formula in stock to offer relief to retailers and allow companies to manage inventories to better meet demand.

Women and families with low incomes, who disproportionately rely on WIC services for their food and nutritional needs, have endured a particularly dangerous situation because of the formula shortage.²⁷ Already at greater risk of food and nutrition insecurity,²⁸ women, families with low incomes, and many others from marginalized communities, including LGBTQI+ people²⁹ and people with disabilities,³⁰ depend on the social safety net. WIC and similar food and nutrition programs offer these individuals and families the support they need to maintain their health and well-being and to protect them from the consequences of supply shortages of necessary goods.

What’s more, current gaps in the social safety net—including inadequate breastfeeding workplace laws that create obstacles for their employees,³¹ coupled with insufficient paid parental leave policies—have made the effects of the infant formula shortage all the more harmful, particularly for women of color and low-income families.³² It is critical to strengthen federal safety net programs to be more responsive to emergencies:

• Strengthen WIC through regulatory means to provide more flexibilities to parents and caregivers in accessing a wider range of formula products, while expanding access to parents and caregivers not currently eligible for the program.
• Waive the maximum monthly allowance of formula that parents and caregivers can purchase under WIC, allowing parents to buy more formula in case of emergencies or to adequately feed particularly hungry babies.
• Invest in creating good jobs to better support women, caregivers, individuals with disabilities, LGBTQI+ people, and other underserved populations, ensuring livable wages and other benefits that make it easier to afford infant and specialty formulas.
• Invest in and strengthen existing workforce supports to give all parents and caregivers the flexibilities they need to meet their families’ needs through workplace breastfeeding policies, paid family and medical leave, access to health care, and more.
• Strengthen and make permanent income support programs such as the expired child tax credit,³³ which give parents more financial stability, allowing them to better manage their food budgets and meet the food and nutritional needs of loved ones.

For communities most deeply affected by the infant formula shortage, federal intervention cannot come soon enough. Many individuals and families lack the resources to build up a sufficient supply or to travel out of their way to purchase formula when there are slim offerings close to home, as is the case for many living in rural areas or food deserts that do not have any grocery stores.³⁴ Low-income women, as well as women of color, are more likely to rely on formula regardless of their feeding preferences, due at least in part to inadequate workplace supports.³⁵ Further, parents and caregivers who have disabilities; have opted to exclusively formula feed; are LGBTQI+, foster, or adoptive parents; or whose infants are medically vulnerable, have extremely limited options for ensuring that their babies get the nutrition they need to support healthy growth and development.³⁶ Creating systems that center these communities helps to mitigate the consequences of their historical marginalization and protect them against future shortages:

• Ensure that federal action is designed to quickly meet the needs of the most vulnerable, including infants; people with disabilities; medically fragile individuals with certain allergies, gastrointestinal conditions, and metabolic disorders; and LGBTQI+, foster, and adoptive parents and guardians.
• Focus on building a long-term, equitable, and resilient food system. To that end, the White House recently announced a national conference on hunger, nutrition, and health to be held in September 2022.³⁷
• In addition to many of the regulatory changes proposed above, Congress has two legislative opportunities to take meaningful action in fostering a food system that better meets the needs of all Americans, while preventing production and supply shortages:
  • In 2022, Congress is due to reauthorize the Child Nutrition and WIC Act, which authorizes all federal child nutrition programs, reaching millions of children and their families each day.³⁸
  • In 2023, Congress will turn its attention to reauthorizing the farm bill. The bill includes the Supplemental Nutrition Assistance Program (SNAP)—the largest anti-hunger program—which supplements the food budget of needy families so they can purchase healthy food and move toward self-sufficiency.³⁹

The Biden administration and congressional lawmakers⁴⁰ are implementing several bipartisan measures⁴¹ to mitigate the formula crisis, including reducing bureaucratic hurdles to get formula on grocery shelves faster, cracking down on corporate price gouging, and increasing supplies. Additionally, federal agencies, including the USDA, FDA, HHS, and FTC, are considering regulatory changes that will increase flexibilities, coordination, and efficiencies in formula production and distribution, ensuring access and affordability of a range of products in all communities.

While these interventions will go a long way in addressing the formula crisis in the short term, federal policymakers must also focus on long-term solutions, including building an equitable, sustainable food system that ensures universal access to safe and quality foods for all people nationwide.

Congress’ reauthorization of the Child Nutrition and WIC Act⁴² and the farm bill offers an unprecedented opportunity to strengthen America’s food production and distribution systems, while addressing emerging challenges of the impact of climate change on national and global food systems. Furthermore, the upcoming White House conference on hunger, nutrition, and health provides a chance to reimagine America’s food system, focusing on sustainable, resilient productions; strong supply chains; adequate supply; and access to culturally and nutritionally diverse, quality, and affordable food for every person. A similar food and nutrition conference last held by the White House in 1969 was a pivotal event that influenced the country’s food policy agenda over the past half-century.⁴³ As the world has changed considerably during that period, it is time to revisit this conversation through the lens of equitable access and affordability and long-term sustainability.

The authors would like to thank Anona Neal, Osub Ahmed, Marc Jarsulic, Jill Rosenthal, Caroline Medina, Elyssa Spitzer, Emily DiMatteo, and Mia Ives-Rublee for their invaluable guidance and support on this brief.