The Formula Shortage, in a Nutshell

Wednesday, June 01, 2022

John Stossel correctly notes that "one factory closure doesn't normally cause massive shortages" in his latest column. There, he nicely summarizes the ridiculous and inexcusable situation regarding the availability of infant formula in the United States.

Among the reasons:

Image by Lucy Wolski, via Unsplash, license.
First: bans on imports. There's plenty of formula on supermarket shelves in Mexico and Europe. Normally, American companies would just buy that and ship it here.

But they can't, because of several destructive government policies.
The import bans exist in part at the behest of the protectionist dairy lobby and in part due to the FDA jealously guarding its authority to enforce such things as formula having specific ingredients, labels listing them in (what it deems) the right order, and labels being in English.
There was a gray market where people were getting around these rules. "American parents enlisted third-party sellers to obtain European infant formula," says [the Cato Institute's Scott] Lincicome.

Boxes of formula arrived, but customs won't let American parents have it. They've "been seizing European baby formula shipments at the border, much like a drug seizure," says Lincicome.
Stossel also notes that the government's mass purchases of formula through welfare programs has limited competition, making our manufacturing base less nimble.

With practically everyone shouting from the rooftops that "capitalism" (which America hasn't actually had for over a century) and "greed" (which didn't exist two or three months ago?) are to blame, it's good to see someone lay out the case that the real culprit is our government's strangulation of free markets from multiple directions, including: protecting dairy farmers from competition, food "safety," and "access" to food -- all at the expense of hungry infants.

All of this was easily preventable by the government leaving markets alone, and ensuring the freedom of businesses and their customers to trade freely.

-- CAV

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