Money Rehab with Nicole Lapin - Understanding the Baby Formula Shortage. Plus, Advice for Parents.

Episode Date: May 25, 2022

There have been many product shortages in the last year, due to both pandemic-related issues and supply-chain disruptions, but nothing quite as anxiety-provoking as the baby formula shortage we're facing now. Today, Nicole explains how this industry got so topsy-turvy and what it has to do with corporate consolidation. Plus, Nicole wanted to share the research she’s done and the resources she’s found, in the hopes that she can be helpful to you and your family in this nerve-wracking time.  See omnystudio.com/listener for privacy information.

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. There have been a lot of product shortages in the last year due to both pandemic-related

issues and supply chain disruptions. We've seen semiconductor chip shortages, furniture shortages, and car shortages, but nothing quite as anxiety-provoking as the baby formula shortage we're facing now. As you know, I don't have kids of my own yet, so I can only imagine what it feels like to see the food supply for your baby dwindling. I wanted to put this episode together to share the research I've done and the resources I've found in hopes that I can be helpful to you and your family during this nerve-wracking time. Here's what's going on.

According to The Atlantic, 40% of baby formula is out of stock nationwide. The shortage has been caused by several interconnected issues that stem from the fact that the formula industry in America is so concentrated. Almost half of the baby formula that Americans use is produced by only three companies, Abbott, Gerber, and Reckitt. The fact that so much of the industry is controlled by a handful of companies means that when there is an issue with one company, the entire industry is affected. That's what's happening now. In February, a factory that makes Abbott's Similac formula was shut down due to a potential bacteria outbreak. Even now, months later, that plant is still not open. Reporters at the New York Times argue that because demand for baby formula is

typically consistent, manufacturers don't even have the ability to scale up production when demand increases. So companies haven't been able to step up to compensate for the simlack under production. Again, as is so often the case, this is an issue that disproportionately affects low-income women, because those women are more likely to work hourly jobs and jobs without paid parental leave, and therefore rely on feeding babies through formula because they simply can't take time to breastfeed. So until production can be scaled up, here's what you should do. I know the temptation might be to try and make your own formula at home, but don't. Doctors strongly advise against attempting to make your own formula. Experts say that striking the correct balance of supplying

babies with the nutrients they need while also avoiding ingredients that they can't process yet is too complex to accomplish at home. I've done a lot of research on resources and found an article in the Times that has some really excellent suggestions on what to do instead. I linked the full article in the show notes, but here are some notable suggestions. Number one, call your child's pediatrician. Pediatricians may have formula samples that you could have or might have insight on local places you can find safe formula rather than trying to make your own. Number two, find a new formula. You may need to go generic, so compare ingredients. Number three, if you think you're going to have to switch formulas, start slowly. I read a story

about one woman in Alabama whose daughter can only tolerate one brand of formula, and she only found small cans in New York for $245. The New York Times says start by mixing three quarters of your usual formula with one quarter of the new one and gradually phase out the old product. If you can't transition gradually because you've run out of your usual formula, that's okay. Although you might notice some more gassiness or general baby fussiness during that transition. For today's tip, you can take straight to the bank. I know that when you're scrambling to do something as important as finding food for your baby,

you'll want to move quickly. But remember that taking a little extra time to prepare can yield a bigger ROI for your time later on. So if your doctor tells you of a place that might have a good formula supply, call before you go. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team Michelle Lanz for her development work, Catherine Law for her production and writing magic,

and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.