On February 17, the largest infant formula maker in the US, Abbott Nutrition, withdrew several lines of infant formula from circulation. It also stopped production at its Sturgis, Michigan, factory. The precautionary action was due to suspicions of contamination in the facilities, an event allegedly responsible for four babies becoming ill, and two of them dying, between the end of 2021 and the beginning of this year. This is the immediate origin of the pressing crisis in the supply of formula milk that the country is experiencing, in which the White House has taken action today.
However, shortages are not new, since they have been dragging on since the beginning of 2021. But the conjunction of the precautionary closure of laboratories and the continued disruption in supply chains that has also been taking place since 2021 turns the deficit into a perfect storm. Last April, the infant formula market registered a shortage of around 40%.
This week it has reached 43%, with states more affected than others (Missouri, Tennessee and Iowa) and a pilgrimage of fathers and mothers through shops, pharmacies and the great Internet market, where the search causes increasingly exorbitant prices. The concern is such that it has deserved the attention of the federal Executive. Treasury Secretary Janet Yellen said Thursday that the Administration will do everything necessary to solve the problem, which is closely followed, while President Joe Biden met with representatives of the sector to address the crisis.
Biden exchanged views with producers — who have tried to fill the gap left by Abbott’s inactivity — and retailers, including the CEOs of the country’s major distribution chains. To all of them, according to the statement released by the White House, he asked for the maximum effort to guarantee families the number of containers they need, given that at the moment the sale is limited to several units per customer. Biden highlighted the specific problems of retailers and how they are working to restock shelves, especially in rural areas, revealing a wide disparity in access. Supplying the most remote communities is another White House priority, the president said.
Among the measures announced today, three stand out: standardize the size of the containers in one, to speed up the speed and scale of production; urge the Federal Trade Commission (FTC, the federal agency that oversees free competition) and attorneys general to take “strong action against any price gouging or unfair marketing practices” (such as the resale of on-line of the product “at a price several times higher”); and streamline the procedures for importing stocks. The United States typically produces 98% of the infant formula it consumes, with the rest coming from Mexico, Chile, Ireland, and the Netherlands.
“As a result of our continued work, more infant formula has been produced in the last four weeks than in the four weeks prior to the recall. [de Abbott] of the market,” a senior White House official said in a telephone meeting with journalists. “But we also know that families across the country remain concerned, especially those who rely on specialty products that are more difficult to replace and are only produced at facilities in Michigan.”
Abbott laboratories have reported this Wednesday that they could restart production at the Michigan facilities within two weeks, while two manufacturers in the industry have increased their activity these weeks by up to 50%, working 24 hours a day, seven weekdays.