The economy and politics are never predictable. Sure, things like gas and wars tend to drive the narrative, but there are always tertiary issues that spring up and are tough to predict. Take the latest baby formula crisis. Who could have predicted a year ago that Americans would not only be facing a formula shortage but that the result of such a shortage could heavily contribute to some real political realignments in the mid-term elections. 

Back in September 2021, a Minnesota infant was diagnosed with a potentially lethal bacteria known as Cronobacter sakazakii. The infant had ingested baby formula manufactured in an Abbott Michigan factory. Later, four additional babies fell sick, and then two infants in Ohio died from a Cronobacter infection. The Food and Drug Administration (FDA) lept into action and an Abbott whistleblower ultimately revealed the company had falsified records surrounding untested formulas and failed on the traceability of potentially contaminated products. 

The FDA promptly closed the Abbott Sturgis facility but in doing so created a massive supply glut. Abbott accounts for roughly 40% of the US formula market and the FDA did not do much in terms of prepping a Plan B to address the impending demand. Retailers were never contacted, nor medical professionals consulted to prevent predictable hoarding and panic buying that happens with any shortage. If COVID-19 taught us anything, when something (masks, cleaning supplies, etc) are rumored to be must-have goods to face a coming crisis, folks will do everything in their power to hoard those items. 

To provide a sense of how necessary baby formula is, nearly one in five newborns in the US are provided formula during their first few days of life. Less than half of all newborns are breastfed exclusively, and by six months, 75% of all babies are receiving some formula. To complicate matters, if a baby was feeding on an Abbott product and then had to switch to another manufacturer, the sudden switch can induce a host of digestive issues. 

Now, the US does import formula from abroad, but the FDA nutritional standards are quite stringent and were not loosened until mid-May. In early June the FDA indicated additional formula was on its way and the first batch of Nestle formula hit Indiana from Switzerland. 

Moving forward, two issues must be resolved. One, Congress should demand answers from Abbott as to why their plants were in such states of disrepair and regulatory neglect. Two, the FDA must answer as to how they rationalized removing 40% of a good that is inelastic (like gas) and failed to foresee hoarding and scarcity that affects the most vulnerable of our population.

This is undoubtedly yet another issue President Joe Biden and his party will have to manage during the mid-terms. Fair or unfair, voters will pin the blame on someone.