Why Imported Baby Formula May Be Here To Stay

The Centers for Disease Control says an estimated 3.6 million babies are born in the United States every year, which works out to a birth rate of 11 for every 1,000 people. To meet the demand for infant formula, CNBC says the United States relies on just four manufacturers: Nestle USA and Perrigo, which produce 90%, Abbott, and Mead Johnson Nutrition. Because of this, when one facility has to close for whatever reason — as Abbott's Michigan's plant did after inspectors found "egregiously unsanitary conditions," the whole supply chain is compromised. As Food and Drug Administration Commissioner Robert Califf put it, "Abbott's enormous market share left it with a responsibility for producing safe infant formula that wasn't met."

So when infant formula began disappearing from store shelves in late spring, President Joe Biden had to invoke the Defense Production Act to increase production of infant milk in the country and allow the Food and Drug Administration to import formula from overseas to fill the gap in supplies, per CNBC. 

Now the Food and Drug Administration says it will be working with formula producers outside the country to continue sending formula to the U.S. as a way of strengthening domestic supplies, and to ensure that a shortage doesn't happen again. A joint statement from Robert Califf, Commissioner of Food and Drugs of the Food and Drug Administration and Susan T. Mayne, director for the Center for Food Safety and Applied Nutrition said: "The need to diversify and strengthen the U.S. infant formula supply is more important than ever."

They added that "the recent shutdown of a major infant formula plant, compounded by unforeseen natural weather events, has shown just how vulnerable the supply chain has become." To that end, the FDA has said it will be holding meetings with companies that import or sell formula on the steps they need to take in order continue selling formula in the U.S. past September. The Biden Administration's emergency use clause comes to an end in November, and an extension or renewal is possible if the need is there, per NPR.

Fortune reports that the FDA has said it wasn't compromising on any health or safety standards in order to allow companies to bring in formula manufactured overseas. The New York Times says that European baby formula on the whole meets the FDA's requirements for what can be sold in the domestic market, even though there are concerns about how safe the formula is for use in the United States. 

The concerns don't have to do with European formula itself. Infant formula made in the E.U. doesn't allow additives like sugar or corn syrup and requires that 30% of the powder is made with lactose. The Times also says both E.U. and U.S. require milk powders to have the same vitamins and minerals, although European infant powders have more of the omega-3 ACID DHA, and American powder has more iron. The concerns have to do with instructions on how to prepare the formula, since both language and units of measurements can be easily misunderstood. In spite of this, Fortune says it is not unheard of for American parents to smuggle quantities of European formula into the country. 

Another barrier is tariff related. According to Fortune, imported baby formula is taxed up to 17.5% in the United States — and that rate could go up if an import quota for dairy is exceeded. The FDA made no mention of this in its announcement, so only time will tell if this eventually becomes a make-or-break issue.