Why We Can't Have Nice Things: The Great Baby Formula Shortage of 2022
A combination of "absurdly high" federal tariffs and excessive FDA regulations created the conditions for a crisis.
"When you walk into the store and there you don't see that packaging…you start to panic," says Kenzie Jaicomo, a new mom whose child was just a few months old when a sudden shortage of baby formula hit the United States last year.
"What am I going to feed my baby?" she remembers thinking, staring at an empty shelf in a neighborhood grocery store.
In the first episode of Why We Can't Have Nice Things, a new podcast series from Reason, we're diving into the causes and consequences of last year's baby formula shortage. Though it was a crisis kicked off by unexpected supply chain issues and contamination problems at a major production facility in Michigan, the roots of the shortage ran straight through Washington, D.C., where poor government policy left American infants hungry and their parents scrambling.
With domestic supply chains snarled, it would have made sense for American grocery stores to turn to foreign producers for replacement supplies of baby formula. Unfortunately, there are "absurdly high" tariffs on imported formula, explains Gabriella Beaumont-Smith, a trade policy analyst at the Cato Institute.
"There are these distribution channels that are basically not established" because the tariffs make it too costly, she says. "And we're talking about baby formula. This is a necessity and we shouldn't be taxing it that high or at all."
It took last year's crisis for Congress to consider lifting those tariffs—and only on a temporary basis. The dairy lobby and other special interests like the isolated, and fragile, American market for baby formula just the way it is.
On this week's episode of Why We Can't Have Nice Things, we'll explain how this crisis unfolded, why the government's efforts to alleviate the shortage mostly failed, and ask whether a free market might have done a better job. Spoiler alert: It would have.
Further reading/viewing for this week's episode:
"Formula for a Crisis," by Scott Lincicome, Beaumont‐Smith, and Alfredo Carrillo Obregon
"My Baby Needed Special Formula From Europe. U.S. Trade Policy Made It Almost Unobtainable," by Kelli Pierce
"The Government Hasn't Learned a Thing From the Baby Formula Shortage," by Emma Camp
"FDA Finally Admits It Caused the Baby Formula Shortage," by Eric Boehm
"The Mystery of the Missing Baby Formula," by ReasonTV
Written by Eric Boehm; produced and edited by Hunt Beaty; additional editing by Ian Keyser. Additional mixing by Luke Allen. Fact-checking by Katherine Sypher.