Tangle - The baby formula shortage.

Episode Date: May 16, 2022

Over the last few weeks, what began as a pandemic-era quirk has spiraled into a national crisis. More than 40% of baby formula is now out of stock in the U.S., a twentyfold increase since the first half of 2021.You can read today's podcast here.You can subscribe to Tangle by clicking here or drop something in our tip jar by clicking here.Our podcast is written by Isaac Saul and produced by Trevor Eichhorn. Music for the podcast was produced by Diet 75.Our newsletter is edited by Bailey Saul, Sean Brady, Ari Weitzman, and produced in conjunction with Tangle’s social media manager Magdalena Bokowa, who also created our logo.--- Send in a voice message: https://podcasters.spotify.com/pod/show/tanglenews/message Hosted on Acast. See acast.com/privacy for more information.

The flu remains a serious disease. Last season, over 102,000 influenza cases have been reported across Canada, which is nearly double the historic average of 52,000 cases. What can you do this flu season? Talk to your pharmacist or doctor about getting a flu shot. Consider FluCellVax Quad and help protect yourself from the flu. It's the first cell-based flu vaccine authorized in Canada for ages 6 months and older, and it may be available for free in your province. Side effects and allergic reactions can occur and 100% protection is not guaranteed. Learn more at flucellvax.ca. If you were listening to this podcast whilst waiting for a flight, would you be relaxing in a premium airport lounge? No? Then start your journey with OneWorld,

a leading alliance of world-class airlines. Reach top-tier status with a One World member airline's frequent flyer program, and you can enjoy an array of benefits, including priority check-in and boarding, and access to nearly 700 premium airport lounges around the world. Discover more at oneworld.com. Tons of conditions apply. From executive producer Isaac Saul, this is Tangle. Good morning, good afternoon, and good evening, and welcome to the Tangle Podcast, a place where you get views from across the political spectrum, some independent thinking without all that hysterical nonsense you find everywhere else. I'm your host, Isaac Saul, and on today's episode, we are going to be talking about the baby formula shortage,

what it means, why it's happening, what some people think we should do. Pretty interesting story, if you ask me. Before we jump in, though, I do want to give a quick update from something we wrote last week. In a reader question last week, somebody asked me if Republicans were really trying to ban IUDs and other birth control methods. One of the people I cited was Idaho State Representative Brent Crane, who said he was going to hold hearings on banning IUDs and Plan B. One reader submitted a local interview with Crane, where he apparently clarified his comments. In his context, I felt was worth noting, so I'm just going to read you a brief summary from a news article about that interview. In a Saturday

interview, Crane clarified that he supports contraception, including IUDs, and would not support hearings banning contraception generally. Instead, he said that he has heard of safety concerns with emergency contraceptives like Plan B and abortion pills and would therefore be willing to hold hearings about them. All right, that's the quick update. As always, before we jump into our main topic, some quick hits. First up, a gunman in Buffalo, New York shot and killed 10 people inside a grocery store. Officials say they have a shooter manifesto and other evidence suggesting that the attack, which took place in a predominantly black neighborhood, was racially motivated. Number two, John Fetterman, Democrats' leading candidate in the Pennsylvania Senate race, announced he was recovering from a stroke he suffered over the weekend. Number three, during

the funeral procession for Shireen Abu-Akhla, the Palestinian-American journalist killed while covering a military raid in the West Bank, Israeli police clashed with mourners and protesters, including some who beat those carrying her casket. Number four, White House Press Secretary Jen Psaki had her last day of work on Friday. She is moving on to MSNBC and will be replaced by Karine Jean-Pierre, the current deputy press secretary. Number five, Elon Musk stunned followers when he announced that his Twitter takeover is now on hold, pending verification about how many spam and fake accounts exist on the platform. Parents are going to stores in search of baby formula only to find empty shelves.

That's because there's a nationwide shortage. But what's causing this shortage and what can be done to fix it? Four companies control 90% of the market. Parago makes store brand formula for companies like Amazon and Walmart. Their CEO tells Reuters he expects the shortage to last the rest of the year. The out of stock rate is over 40. Parents are scrambling for baby formula. It's being called a national crisis, and rightly so. But experts say there is nothing the Biden administration can do to help parents tied over this crisis. Over the last few weeks, what began as a pandemic-era quirk has spiraled into a national crisis. More than 40 percent of baby

formula is now out of stock in the United States, a 20-fold increase since the first half of 2021. Target, Walmart, CVS, and Walgreens are limiting how much infant and toddler formula customers can purchase per visit. Millions of families depend on baby formula. Less than half of all babies born in the United States were exclusively breastfed in their first three months, according to the CDC. were exclusively breastfed in their first three months, according to the CDC. On Thursday, President Joe Biden met with executives from infant formula manufacturers and retailers, including Target, Walmart, and Nestle's Gerber, pressing them to do everything possible to get families access amid a nationwide shortage, that's according to Reuters.

Several contributing factors have been pointed to as potential causes of the shortage. One that has gotten a lot of attention in the news was the detection of chronobacter at a Michigan plant run by Abbott. The discovery came amidst reports of infections in infants and two infant deaths. It led to a recall, though Abbott has mentioned that it found no evidence of any contaminated supplies. Abbott is one of just three plants that produce nearly all the baby formula in the United States, so the recall immediately sent shockwaves through the industry. Even before the recall, though, there was a shortage of formula and prices had spiked.

Like many other products, baby formula supply has been deeply affected by the pandemic. Early on, many parents bought as much baby formula as they could. This hoarding led to a steep increase in demand, followed by a sharp drop because many parents had stocked months worth of baby formula supply. The erratic demand made it difficult for companies to plan their production, and when the demand rose again, it outstripped how much formula was available. Baby formula is also a heavily regulated industry. Some of the United States Food and Drug Administration's most stringent standards regulate baby formula, even disallowing most formula from Europe due to labeling issues.

There are also heavy taxes, some as high as 17% on formula imports. Under the latest United States Mexico-Canada agreement, the USMCA, baby formula imports from Canada are too heavily taxed for fair pricing. On top of that, the Special Supplemental Nutrition Program for Women, Infants, and Children, known as WIC, is the largest purchaser of baby formula in the U.S. It awards contracts to major producers, buys up supply in bulk, and then helps distribute that formula to poor families at a discount. The White House says it is considering invoking the Defense Production Act to produce more formula. The FDA says it is going to announce new steps to allow imports of certain import formula products from abroad. And the White House has also called on the Federal Trade

Commission to investigate predatory conduct like price gouging. There is actually a strong consensus on this issue on the left and the right that government policies are worsening the baby formula shortage and that the government needs to take some actions to address it. There are differences in precisely how to go about that, but commentators on both sides think the trade policies and regulations related to baby formula could be reformed most quickly. Instead of our normal left-right dichotomy today, we're just going to share some opinions from across the political spectrum about what should be done and who is to blame. Hey guys, this is Isaac here. If you are listening to this podcast, it's probably because you're interested in finding some common ground. If that's the case, I have a great recommendation for you.

It's a new podcast called Let's Find Common Ground. They are trying to do the opposite of what a lot of other news organizations do, which is seize on fear, anger, distrust, and division. Remarkable, innovative people who are working to bridge differences and reach an understanding with those who see the world a little differently than they do are having conversations on this podcast every day. You'll hear from politicians, scholars, activists, journalists, and everyday people. They share their personal stories about finding common ground on race, the environment, criminal justice reform, and all the other controversial topics you can think of. New podcast episodes are released every two weeks, and you can join hosts Richard Davies

and Ashley Milne-Tight for Let's Find Common Ground. You can find episodes at commongroundcommittee.org slash podcast, or wherever you get your podcasts. That's commongroundcommittee.org slash podcast. First up, Scott Lincecum said that U.S. policy is depressing supply. In some ways, the infant formula situation is just another example of the pandemic doing its thing, he wrote. The Wall Street Journal, for example, reported in January, before the Big Abbott recall, that domestic producers were struggling with the same things that almost all U.S. manufacturers are struggling with. Labor and material shortages, transportation and logistic hiccups, and erratic demand.

Unfortunately, the infant formula crisis isn't simply another case of a one-off event causing pandemic-related supply chain pressures to boil over. Instead, U.S. policy has exasperated the nation's infant formula problem by depressing potential supply. The United States maintains high tariff barriers to imports of formula from other nations, The United States maintains high tariff barriers to imports of formula from other nations, all part of our government's longstanding subsidization and protection of the politically powerful U.S. dairy industry, Linscombe wrote. If tariffs were the only problem here, then high prices in the United States right now might include alternative supplies from overseas producers looking for new customers and profits. Unfortunately, however, the United States also imposes significant non-tariff barriers on all imports of infant formula. Most notable are strict FDA labeling

and nutritional standards that any formula producer wishing to sell here must meet. Aspiring manufacturers also must register with the agency at least 90 days in advance and undergo an initial FDA inspection and then annual inspections thereafter. And the FDA maintains a long red list of non-compliant products that are subject to immediate detention upon arriving on our shores. William Marler wrote that the FDA failed to protect families in the formula shortage crisis. From September 2021 to February 2022, the CDC received reports of chronobacter bacteria cases in infants in Minnesota, Ohio, and Texas

that resulted in four illnesses with two deaths, Marler wrote. These illnesses were ultimately linked by the CDC and FDA to the consumption of powdered infant formula produced by Abbott in its Sturgis, Michigan facility. A worldwide recall of formula produced in the plant has left store shelves bare and parents scrambling for safe alternatives to feed their babies. How did the FDA find itself facing thousands of scared and angry parents? It is a history of warning signs ignored. In September 2019, the last time the FDA inspected the facility, the FDA cited Abbott for failing to test an adequate amount of formula to assure that it met the required microbiological quality standards.

In September 2021, after two years with no on-site inspection, the FDA returned to Abbott and found several concerning practices that likely led to formula contamination. Specifically, Abbott failed to maintain a building used in the manufacture, processing, packing, or holding of infant formula in a clean and sanitary condition. Baby formula is more than a canned commodity. It's food for the most vulnerable, he wrote. It requires the highest of standards and mandates the closest of inspections. Yes, babies' lives depended and depend on it. The CDC needs to reconsider making chronobacter a nationwide reportable disease so no illnesses are missing and outbreaks figured out sooner

so the product can be taken off the market in days instead of months. The FDA leadership has not been held to account for inadequate inspections and failing to act on the whistleblower warnings. In National Review, Dominic Pico wrote about how government policy is creating artificial price controls. A 2010 study from the USDA's Economic Research Service estimated that 57 to 68% of all baby formulas sold in the U.S. was purchased through the Special Supplemental Nutrition Program for Women, Infants, and Children, the WIC. That means over half of the baby formula that's consumed in the U.S. isn't really bought and sold on a free market at all, Pico said. The federal government

started WIC on a temporary basis in 1972, then made it permanent in 1975 as a way to help impoverished mothers afford food for their babies. As Douglas Besharov and Douglas Call pointed out for the American Enterprise Institute in 2017, it has expanded far beyond its original purpose. WIC is a federally funded program overseen by the USDA that is administered by the states. To be eligible for WIC is a federally funded program overseen by the USDA that is administered by the states. To be eligible for WIC purchases, baby formula makers bid on contracts with state governments, Pico wrote. With the government responsible for over half of the country's baby formula purchases, price signals don't work as they should. As research firm Data Assembly noted,

the baby formula market was beginning to go awry before the Abbott recall. The out-of-stock percentage moved from its normal range into double digits in July of last year. Yet overall prices didn't increase when out-of-stock percentages started to increase, it found. Such behavior would be very strange in a free market, but it makes perfect sense when you consider that predetermined contracts with state governments are responsible for such a large segment of total purchases. In Deseret News, Bethany Mandel said, If you thought parents were mad about not being able to send their children to school, just wait for the anger of parents going from store to store searching for formula and coming home empty-handed. Last month, U.S. Senator Jack Reed, a Democrat from Rhode Island,

wrote a letter to the Biden administration asking the heads of the U.S. Department of Agriculture and the Food and Drug Administration a series of questions, including 1. What steps have your agencies taken to minimize the impact of the immediate shortage? 2. When do your agencies expect baby formula inventory will be back to sufficient levels? 3. What measures should be taken in the long term to minimize the supply chain disruptions for what is an essential product for many families? If senators, especially a Democratic senator, were writing letters to the administration in mid-April and nothing has been said or done to date, it's clear that the Biden administration's priorities are elsewhere, Mandel said. Senator Tom Cotton, the Republican from Arkansas, showed how it would be done and

led the way, pointing out that the shortage is even worse for mothers who don't have the time to spend hours driving around looking for formula or the money to have it shipped to them in bulk, as some parents are doing. 2,000 influenza cases have been reported across Canada, which is nearly double the historic average of 52,000 cases. What can you do this flu season? Talk to your pharmacist or doctor about getting a flu shot. Consider FluCellVax Quad and help protect yourself from the flu. It's the first cell-based flu vaccine authorized in Canada for ages six months and older, and it may be available for free in your province. Side effects and allergic reactions can occur, and 100% protection is not guaranteed. Learn more at flucellvax.ca. It's time for other Republicans to follow Cotton's lead and join with Democrats like

Reid to treat this as an issue of utmost priority. It says a great deal about a nation's priorities when disappearing nutrition for our most vulnerable infants doesn't cause a five-alarm fire in the halls of power. Political inaction on this issue should create a firestorm unlike anything we've seen to date. If it doesn't, our society is troubled beyond measure. In The Atlantic, Derek Thompson called out our trade policy. FDA regulation of formula is so stringent that most of the stuff that comes out of Europe is illegal to buy here due to technicalities like labeling requirements, he wrote. Nevertheless, one study found that many European formulas meet the FDA nutritional guidelines and, in some ways, might even be better than American formula because the European Union bans certain sugars, such as corn syrup,

and requires formulas to have a higher share of lactose. Some parents who don't care about the FDA's imprimatur try to circumvent regulations by ordering formula from Europe through third-party vendors. But U.S. customs agents have been known to seize shipments at the border. U.S. policy also restricts the importation of formula that does meet FDA requirements, Thompson added. At high volumes, the tax on formula imports can exceed 17%. And under President Donald Trump, the U.S. entered into a new North American trade agreement that actively discourages formula imports from our largest trading partner, Canada. Conservative populists and even liberals who are skeptical of globalization sometimes argue that if the U.S. made everything within our borders,

our economy would be more resilient. But the baby formula shortage suggests that things don't always work out that way. Instead, we're seeing what happens when we reduce trade with other countries for an essential good. We're more vulnerable to emergencies like a bacteria-infested plant in Michigan. In the New York Times, Jessica Gross said the shortage is not an excuse to be cruel. There are parents who are desperate to feed their babies, so this should be a very straightforward issue, feed those babies. And yet there are some people trying to score partisan points, either by juxtaposing the issue with American aid to Ukraine, as some who voted against aid have done, as if our current Ukraine policy hinges on a formula recall, or suggesting

that babies of undocumented immigrants in federal custody should go to the back of the line. Instead of calling attention to this ongoing problem and looking for a more permanent solution to make sure parents do not have stress over basic nutrition for their infants, I've seen a spate of ignorant comments on social media using this opportunity to shame women who can't or don't want to breastfeed, she wrote. I've also seen people say that parents shouldn't have babies they can't afford, which is just cruel. Babies need to be fed, full stop. And even if their mothers could breastfeed to begin with, which is not always the case,

restarting the process when you have already weaned can take weeks or even months. Babies can't wait for the nutrition that they need. Alright, that's it for some wide range of opinions on this, which brings us to my take. So I don't know much about baby formula or the way foodborne illnesses get inspected and regulated. I mean, it's just impossible to have a deep knowledge of things as obscure as that. But I do know a ton about trade policy and politics, I think, and this story is a great encapsulation of so many other crises that we now face in the wake of the pandemic. It's also a prime example of a modern issue that really is multifaceted in every sense. On the trade side, it's a nice reminder that we can do it alone is

not always the best policy. I've written very positively about the America First trade agenda championed by former President Donald Trump, and in various ways supported or shared by liberals like Senator Bernie Sanders or President Joe Biden. Domestic production is good. Domestic jobs are good. Not being dependent on despotic foreign governments for essential goods like energy or medical supplies is smart. But restricting essential trade with one of our largest and most trusted partners, Canada, seems nonsensical. And there is a cost to everything. Right now, we're seeing the cost of a highly regulated industry with no breathing room.

Baby formula is a sort of maximalist government approach. In an odd paradox, all the regulation has essentially produced a near-monopoly we sometimes see when a free market runs wild, with just three giant companies accounting for nearly all the domestic production, and the entire non-US world locked out of even competing here. Right now, we're seeing the cost of a highly regulated industry with no breathing room. Baby formula is a sort of maximalist government approach. There is a strong case for the safety regulations in place to protect consumers and infants, of course. Food inspection and sussing out bacterial contamination early on is popular policy and

for good reason. In an odd paradox, though, the regulation designed to disincentivize foreign competition has essentially produced a near-monopoly we sometimes see when a free market runs wild, which is three giant companies accounting for nearly all the domestic production and the entire non-U.S. world locked out of even competing here. At the same time, that stringent safety regulation, which again I think is rightly popular, has buried one of those three companies in investigations and recalls, and it appears that company has acted with some basic disregard for the well-being of its consumers. It is all the worst of the free market's occasional lax safety protocols and excessive government regulation all in one story.

Now, the Biden administration is playing catch-up and seems to have a limited set of options. Ramping up domestic production is the obvious answer, but it seems wise to lower the barrier of entry for reliable foreign companies too. Why not? You solve the crisis in the near term, or at least make it better, and maybe you open the door for more production streams and competition long term, which would create a more stable base of supply and reduce prices for all the American families respectively, all while making it easier for the ones who already prefer baby formula from abroad. Politically, it's hard to think of a worse situation for Biden. I don't think his administration really deserves the lion's share of the blame for the start of this crisis, given he inherited the nature of our trade policies, the supply chain issues, and the pandemic. But,

their response hasn't been immediate, and it hasn't moved the needle yet, which voters will notice. More simply, most parents scavenging eBay for baby formula probably aren't going to spend too much time looking into all the reasons their child may be going hungry. They're just going to know that trade policy and government regulation plays a role, and they know who their president is now, even if the former president signed the latest USMCA. With already anemic poll numbers, the increasingly resilient inflation issues, and midterm primaries underway, such a crisis is the last thing this administration needs in its lap. Whatever solution they focus their resources on had better work, or an already uphill midterm season could spiral into a political calamity.

All right, next up is Your Questions Answered. This one is from Bob in El Cajon, California. He said, Today I heard the press secretary defend the FDA's baby formula ban by saying the formula had killed babies. I also heard that the CDC had checked the bacteria in the baby formula and studied the baby deaths attributed to it and discovered that they were not related. Which government agency do we believe? For starters, I think it's important

to be precise here. What I saw, and maybe you heard something different, was Press Secretary Jen Psaki say the issue here is that a manufacturer was taken offline because they did not produce a safe baby formula and this issue is because there was unsafe product that the FDA recalled to save babies' lives, end quote. It's a little semantic, but she did not say directly that their formula had killed babies. She said the recall was to save babies' lives, and that they had failed to produce a safe formula. I think we can put one and one together, but Psaki is obviously doing some politicking there, and I agree with you that this is a bit misleading. I thought Jason Freeman's piece on this in the

Wall Street Journal was pretty interesting and worth the read. I almost included it in today's opinions. Essentially, the FDA began investigating Abbott because consumer complaints were all coming from powdered formula produced in its Michigan facility. Abbott has strongly denied that the chronobacter infections were from contamination at its plant, and best I can tell, their defense is legitimate. Again, I'm not a food contamination expert, so I'll defer to the people who are, but reporting has shown that the CDC found different strains of chronobacter in the baby formula than they did in Abbott's plant, suggesting contamination happened after the formula was opened, and this is totally plausible as this bacteria is fairly common. Abbott's plant, suggesting contamination happened after the formula was opened, and this is totally

plausible as this bacteria is fairly common. Abbott has also said all finished products made at the Michigan plant tested negative. I haven't seen any government agency contend this is untrue. Abbott has also said all finished products made at the Michigan plant tested negative. I haven't seen any government agency contend this is untrue. So, is it possible the contamination happened there? Yes. People are also saying that Abbott doesn't test nearly enough. But has the government proved that yet? No.

All right, next up is our story that matters for today. The United States has reached over 1 million COVID-19 deaths, according to the CDC. The grim milestone comes two and a half years into the pandemic and means the U.S. continues to have more deaths per capita than Western Europe or Canada. While the nature of how the United States counts deaths has been contentious throughout the pandemic, the CDC says it believes its count is actually lower than the real total, given how many people may have died at home or in a hospital without being tested for COVID-19. In March of 2020, the Trump administration said it hoped to keep the number of deaths to 100,000

to 200,000 based on early warnings about the severity of the virus. About 600,000 people have died from the virus since President Biden took office in January of 2021, which was in the middle of the major Omicron wave. The total of COVID-19 deaths globally is now estimated to be 15 million. The Hill has the story on that, and there is a link to it in today's newsletter. All right, next up is our numbers section. The current birth rate in the United States, according to the UN, is 12.012 per 1,000 people. The birth rate in 2020, according to the UN, was 11 per 1,000 people. The percentage of babies given formula in their first two days of life in 2020 was 20%, according to the CDC. The average amount of money families

spend on baby formula per year is $1,200 to $1,500. The number of required nutrients in baby formula, according to the FDA, is 29. All right, and last but not least, our have a nice day section, a passenger with no flying experience aboard a Cessna 208 successfully landed the plane in Florida after the pilot became incapacitated. Darren Henderson, the 39-year-old man, was behind what is being dubbed the miracle in the air after he took over the controls during a flight back from the Bahamas with one other passenger. The pilot told Henderson he wasn't feeling well before falling against the controls, sending the plane into a nosedive. Henderson managed to pull the plane out of the nosedive

and contact the Treasure Coast International Airport for help. I've got a serious situation here, he's heard on the recording. The pilot is incoherent, and I have no idea how to fly the airplane. The lead air traffic controller gave him instructions on how to land the plane safely on the ground. The Miami Herald has the remarkable story. There is a link to it in today's newsletter. All right, everybody, that is it for today's podcast.

As always, if you want to support our work, go to readtangle.com slash membership or just give us a five-star rating and share the podcast with your friends. Appreciate it, and we'll be right back same time tomorrow. Peace. who also helped create our logo. The podcast is edited by Trevor Eichhorn and music for the podcast was produced by Diet 75. For more from Tangle, subscribe to our newsletter or check

out our content archives at www.readtangle.com. The flu remains a serious disease. Last season, over 102,000 influenza cases have been reported across Canada, which is nearly double the historic average of 52,000 cases. What can you do this flu season? Talk to your pharmacist or doctor about getting a flu shot. Consider FluCellVax Quad and help protect yourself from the flu. It's the first cell-based flu vaccine authorized in Canada for ages 6 months and older, and it may be available for free in your province.

Side effects and allergic reactions can occur, and 100% protection is not guaranteed. Learn more at flucellvax.ca. If you were listening to this podcast whilst waiting for a flight, would you be relaxing in a premium airport lounge? No? Then start your journey with One World, a leading alliance of world-class airlines.

Reach top-tier status with a One World member airline's frequent flyer program and you can enjoy an array of benefits, including priority check-in and boarding, and access to nearly 700 premium airport lounges around the world. Discover more at oneworld.com. Tons of conditions apply.