Parents Still Poached of Baby Formula While Egg Supply Is Turning Sunny Side Up

Scott Lincicome,Gabriella Beaumont-Smith, and Alfredo Carrillo ObregonReports last Friday broke that the Department of Justice (DOJ) hasopened an investigation into potential criminal conduct at the Michigan factory at the center of the “nationwide infant formula shortage” that lasted for most of 2022. Whether laws were broken at the Abbott Laboratories plant is a matter for the DOJ, but we’re confident that the investigators won’t discover the real source of last year’s problems: federal policy.As we explain in new Catobriefing paper, the Michigan plant closure surely put a  major dent in U.S. infant formula production, but a wicked combination of trade, regulatory, and welfare policies turned the situation into a full‐​blown national crisis. In particular, tariff and non‐​tariff measures blocked imported formula from large, reputable, and in‐​demand pro ducers abroad—producers that could’ve otherwise filled gaps left by the factory shutdown. At the same time, strict domestic regulations and government contracts for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) discouraged domestic startups and prevented formu la prices from adjusting. The result was a sclerotic, concentrated market in which a single factory closure produced persistent, nationwide shortages that required multiple emergency government actions—a situation that few other products, even ones like eggs that have been hit by similar shocks, expe...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs