ASU professor looks at baby formula shortage, supply chain issues

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Arizona and the U.S. have been suffering from a severe baby formula shortage, with countless families unable to find formula on store shelves. Experts say there have been several factors causing the supply chain to be affected. COVID led to stockpiling, and the industry never recovered. Also, one factory was shut down after bacteria was found in their supply. The birth rate in 2021 was 9% higher than 2020. And when the Trump administration renegotiated the new NAFTA, they made it more difficult for Canada to export baby formula to the U.S. All of those factors led to baby formula in short supply and high demand.

On Arizona Horizon, we spoke to Dale Rogers, a Professor of Supply Chain Management at ASU’s  W.P. Carey School. He agrees that part of the problem is that so few companies produce the needed formula.  “A lot of it is regulation around baby formula,” Professor Rogers said. “There are very tight regulations around it through the FDA…It’s a controlled substance. And there aren’t that many players.” Almost 98% of this country’s formula supply comes from just a few domestic manufacturers,

Experts say another problem with the scarcity of formula is price gouging. Many parents struggling to find formula are reporting that price gougers are selling formula online, and marking up the prices by as much as 300%. And right now there is no federal law prohibiting price gouging. Rogers says he agrees, that online sellers are charging triple the price, targeting families in need. “I think the big retailers aren’t really gouging,” he said.

Rogers also said he has observed parents firsthand looking for formula in stores like Target, but finding only empty shelves.  “It is a perfect storm,” he said, noting that there are tough guidelines about importing formula. “It’s really hard too play catch-up. It’s hard to get more stuff.”

Some parents have been forced to ration the amount of formula they use. The shortage has even sent some children to the hospital, because they can’t get enough nutrition. Some families have resorted to making their own formula, but medical experts advise against that.

However, the Biden Administration announced this week that it would start easing some of the processes required to import baby formula into the U.S. And more baby formula is expected on store shelves as soon as this weekend, thanks to a variety of government efforts. But still, it could take months before the nation’s supply goes back to normal.

The U.S. Department of Health & Human Services is providing families with resources to find Formula during the shortage. Visit https://www.hhs.gov/formula/index.html for information.

And the Arizona Department of Health Services urges families to turn to the Arizona Supplemental Nutrition Program for Women, Infants, and Children for help.

A baby formula shortage has been sweeping the nation. It could take months before the nation's supply goes back to normal.

Dale Rogers/Professor of Supply Chain Management, W.P. Carey School at ASU

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