Economics and politics are never predictable. Sure, things like gas and wars tend to drive the narrative, but there are always tertiary issues that crop up that are hard to predict. Take the latest formula crisis. Who could have predicted a year ago that Americans would not only face a shortage of formula, but that the outcome of such a shortage could strongly contribute to real political realignments in the midterm elections.
In September 2021, an infant in Minnesota was diagnosed with a life-threatening bacteria known as Cronobacter sakazakii. The infant had ingested formula made at an Abbott plant in Michigan. Later, four more babies fell ill, and then two infants in Ohio died of Cronobacter infection. The Food and Drug Administration (FDA) stepped in, and an Abbott whistleblower eventually revealed that the company falsified records regarding untested formulas and failed to trace potentially contaminated products.
The FDA quickly closed the Abbott Sturgis facility, but in doing so created a huge supply glut. Abbott accounts for about 40% of the US formulas market, and the FDA has done little in the way of preparing a plan B to meet the looming demand. Retailers were never contacted, nor medical professionals consulted to avoid the predictable hoarding and panic buying that occurs when there is a shortage. If COVID-19 has taught us anything, when we say that something (masks, cleaning supplies, etc.) is a must-have for dealing with an upcoming crisis, people will do everything in their power to accumulate these items.
To give an idea of the need for formula, nearly one in five newborns in the United States receive formula during their first days of life. Less than half of all newborns are exclusively breastfed, and at six months, 75% of all babies receive formula. To complicate matters, if a baby fed on an Abbott product and then had to switch to another manufacturer, the sudden change can induce a host of digestive issues.
Now the United States imports formula from overseas, but the FDA’s nutritional standards are quite strict and were only relaxed in mid-May. In early June, the FDA reported that additional formula was on the way, and the first batch of Nestlé formula hit Indiana from Switzerland.
Moving forward, two issues need to be resolved. First, Congress should demand answers from Abbott as to why their factories were in such a state of disrepair and regulatory neglect. Second, the FDA must answer for how it rationalized the 40% withdrawal of an inelastic good (like gas) and failed to foresee the hoarding and scarcity that affects the most vulnerable in our population.
This is undoubtedly another issue that President Joe Biden and his party will have to deal with mid-term. Fair or unfair, voters will blame someone.