Biden confronts formula shortage getting worse after US action

President Joe Biden will meet with baby formula manufacturers on Wednesday to tout his administration’s efforts to combat a shortage that’s only worsening across the country, risking backlash from angry parents.

Ahead of the meeting, the White House announced a third round of formula imports to the US, the equivalent of 3.7 million bottles from the UK manufacturer Kendal Nutricare. The formula will arrive at several US airports over the next three weeks, the Biden administration said.

Abbott Laboratories, the manufacturer whose plant shutdown contributed to the US shortage, will not attend the meeting with Biden, according to a list provided by the White House. The leaders of ByHeart Inc., Bubs Australia, Reckitt Benckiser Group PLC, Perrigo Company PLC and Gerber Products Co. are scheduled to participate.

The plight of parents struggling to feed their children in one of the wealthiest nations in the world is the latest crisis to buffet the White House, on top of persistent rising prices, Covid-19 and Russia’s invasion of Ukraine. The administration was slow to respond after Abbott Labs shut down a factory in Michigan, exacerbating shortages and exposing weaknesses in the country’s food supply chain. Lawmakers of both parties have responded with outrage, demanding the Food and Drug Administration explain its delay and act swiftly to restore supplies.

The White House has been playing catch-up on a dire situation for parents of babies and medically vulnerable kids. Biden has used a law allowing him to nationalize production to make sure formula manufactures can obtain raw materials ahead of other customers, and created a program called “Operation Fly Formula” to import supplies from other countries with strong regulatory oversight.

Earlier Wednesday, the Agriculture Department announced $2.1 billion in new funding to bolster food supply chains, including initiatives to expand small- and mid-sized formula processing plants.

A White House spokesperson said Abbott is not part of Biden’s meeting with CEOs and leaders because the president is focused on ramping up production and providing safe infant formula to American families. The companies participating in Wednesday’s meeting are a subset of those working with the administration to increase supply whether it be through the Defense Production Act, Operation Fly Formula and the FDA’s importation guidance, the spokesperson said.

Abbott did not immediately respond to a request for comment.

The formula shortage took a dramatic turn for the worse last month, according to data on 130,000 stores. Out-of-stock rates spiked to 70% nationally for the week ending May 21, up from 45% the prior week, based on data from the retail-tracking firm Datasembly.

More than two-thirds of states had shortage rates over 70%, with California, Missouri, Minnesota, Nevada, Montana, Louisiana, Arizona and Utah over 80%, and Utah hit hardest at 89%, up from 49% a week earlier.

The shortage is particularly acute in some large cities, including Houston, where out-of-stock rates skyrocketed to an alarming 90%, up from 56% a week earlier.

San Francisco and Sacramento, which previously had some of the lowest out-of-stock rates at 31% and 32% respectively, saw their shortage rates spike precipitously last week, to 87% and 88%.

Federal and local regulators have taken steps to try to increase supply. In addition to the importation program, the FDA announced this week that it would ease import rules. At the local level, some cities and states are enacting provisions to prevent price gouging.

Brian Deese, Biden’s top economic adviser, said on CNN’s “State of the Union” last week that a recent shipment of 70,000 pounds of baby formula to Indianapolis represents 15% of the overall national volume needed and more is on the way.

Robert Cleveland, the operational leader for Mead Johnson’s nutrition business in North America and Europe, told Bloomberg last week that the company was attempting to gain FDA clearance to send Enfamil infant formula from its factories in Mexico and Singapore to the US. Mead Johnson is a unit of Reckitt Benckiser Group.

Cleveland said he anticipated Mead Johnson would need air freight assistance from the US government to quickly send the product from Singapore and that it would be blended and packaged in the US. He said the company would be able to send 200 metric tons of formula from Singapore in the first month and 500 metric tons in following months, and could possibly send more from its Mexico facility.