America is facing crises. The land of freedom just saw a “racially motivated” mass shooting at Buffalo supermarket, where a white man went on a shooting spree against the black people. The American Dream also saw how more than US$7 trillion in market value of the blue chip stocks in the S&P 500 has been wiped out in the meltdown of 2022.

 

Additionally, the United State of America has thrown more than US$6 trillion in the war against Coronavirus, giving away money to boost people’s savings. Yet, by February this year, a survey done by the New York Times showed only 16% of respondents said they had more in savings than before the pandemic. And the inflation is still at its highest in 40 years.

 

Most humiliating of all crises is perhaps this – the USA is running out of baby formula.  This is not fake news or disinformation. Yes, it’s unthinkable that the greatest and richest country in the world – military superpower and largest economic powerhouse – is facing a shortage of infant food. Normally, such problem could only happen to countries which Donald Trump described as “shithole nations”.

America’s baby formula shortage has now become a full-blown national crisis, something that Trump would think could only happen in some poor African countries, or even in China. But the infant formula shortage crisis for American families is real. In fact, according to data firm Datasembly, a jaw-dropping 43% of baby formula products are out of stock nationwide.

 

As Western news media were busy mocking China’s zero-Covid policy for creating food shortages, little did they realize that the U.S. was facing a bigger domestic problem of its own making. But how did the country plunge into such a crisis that mothers have to hunt from store to store to feed their infants? Biden administration has blamed hoarding for the empty shelves of supply.

 

President “Sleepy Joe” Biden has even ridiculed American parents and joked about the shortage, saying that only “mind readers” could predict the nationwide shortage of baby formula, despite the fact that the government knew about the crisis for months. Republicans have blamed the White House for not acting quickly enough to restock empty store shelves or to boost production.

The shortage problem did not happen overnight. It was caused by a combination of factors, including product recall, Covid-19, supply chain, stockpiling, incompetence, arrogance, hoarding, trade policy, inflation and even Ukraine war. It has gone so bad that mothers have to either ration food for their babies or buy baby formula on the internet at double or triple their normal price – if they’re lucky enough not to be scammed.

 

In February, Abbot Laboratories recalled several brands of baby formula, including Similac, and shut down a plant in Michigan after complaints about bacterial infections in infants who had consumed its powdered formula. Four infants fell ill, including two who died, forcing the FDA (Food and Drug Administration) to investigate. Pathogen “Cronobacter Sakazakii” was found in the plant.

 

But even before the episode of baby formula recall, the shortage was already visible as a result of the global supply chain crisis due to Covid-19 pandemic. As early as 2020, the sales of baby food skyrocketed as Americans scrambled to stockpile baby formula, the same way they did with toilet paper. This was the “hoarding” that President Biden probably referred to.

As American families started consuming their stockpiles, sales plunged for obvious reason. The low demand led to producers or suppliers cutting production in 2021. But when the demand increases in 2022, orders are surging faster than supply is recovering. This creates a sudden shortage, compounded by the Abbot’s plant shutdown. Some have blamed the FDA for causing a panic buying.

 

Months before the Abbot’s plant was closed, detailed inspection reports produced by the FDA already showed “concerns of contamination“. It’s unknown whether the FDA was under political pressure not to take action or was simply incompetent – till the death of two infants. Abbot accounted for 42% of the U.S. formula market, about 95% of which is produced domestically.

 

Now, here’s the biggest problem that the U.S. government does not want the people to know. To protect American producers, only four major manufacturers are allowed to do business – Mead Johnson, Nestle, Perrigo and of course, Abbot. Foreign brands are slapped 17.5% in tariffs to prevent competition. To make life more difficult for foreign players, FDA labelling is imposed to limit imports.

Even dairy industry from allies like Canada is hit with quotas and tariffs as part of USMCA (United States-Mexico-Canada Agreement) trade deal, thanks to Donald Trump. FDA regulation was designed to be super strict that most of the products, including baby formula, that comes from Europe automatically become “illegal” due to technicalities such as labeling requirements.

 

It doesn’t matter whether European or Canadian formulas are better than American formula because the U.S. customs agents are experts in seizing shipments at the border that does not meet FDA requirements. It’s not hard to see how the crisis is self-inflicted. On one hand, foreign formula is restricted even during a shortage; while on the other hand, Abbot’s factory is still not up and running.

 

To make matters worse, the Department of Agriculture has a special group called WIC (Special Supplemental Nutrition Program for Women, Infants, and Children). What is so special about this welfare program is that not only it is the largest purchaser of infant formula in the U.S. (57% – 68% of all infant formula sold), it also awards baby formula contract to only three companies.

A 2011 analysis by USDA showed that three companies accounted for practically all U.S. formula sales – Abbott, Mead Johnson, and Gerber. To win contracts, the companies offer deep discounts – about 85% of wholesale cost – because it comes with the “monopoly privilege”. Mothers can only use WIC vouchers to purchase formula from the winning manufacturer in each state.

 

This means impoverished families are not only being controlled to buying formula from certain American manufacturer, they are the first to be trapped during a shortage crisis. Only now the White House said the Department of Agriculture has started talking about providing flexibility so that low-income families on the WIC plan can buy from any manufacturer.

 

But the fact that the shutdown of just one plant could easily worsen the industry-wide infant formula shortage speaks volumes about the country’s vulnerability in the healthcare system. Isn’t this a threat to the national security, something which both Donald Trump and Joe Biden loved to use against foreign countries whenever America can’t compete on a level playing field?

The U.S. is now paying the price for launching a trade war with every country that it doesn’t like, forcing everything to be produced in America without any contingency plan, let alone proactive measures, when things go south. It also wanted to limit competition and promote monopoly, while at the same time controls private economy – biting off more than it can chew.

 

Recklessly, the U.S. thought it could win the proxy war when it deliberately provoked Russia to invade Ukraine. But the timing was bad. The Covid-19 pandemic is still at its early stage of recovery. The war in Ukraine, coupled with the ongoing drought conditions, has triggered inflation – prices increase to not only wheat, corn, eggs, chicken, gasoline and whatnot, but also baby formula.

 

Still, the crisis could be averted if Biden administration spends more time – and public funds – on the domestic problem. Instead, the U.S. government chose to prioritize Ukrainians over Americans. The U.S. House of Representatives has just approved more than US$40 billion new aids for Ukraine while parents across the country are facing baby formula shortages.

Former Navy Seal Robert J. O’Neill asked – “How much baby formula could we buy with US$40 billion? I’m betting it’s a lot”. The Biden administration has also been accused of prioritizing the needs of migrant children over American children by providing formula to children at the Southern border, despite the U.S. is being hit with inflation, poverty and inability to buy baby formula.

 

Indeed, it’s a national disgrace, if not humiliation, that America’s parents are struggling to feed their children even in the year 2022 while the leaders are too busy pampering Ukraine with American taxpayers’ money. Biden believed it was more important to aid Ukrainians than to help 1-million American babies. To add insult to the injury, the US$40 billion new aids to Ukraine was US$7 billion more than President Biden had requested.

 

Other Articles That May Interest You …

• From Cheap Money To Ukraine War – How The U.S. Screws Up Its Inflation, And Scrambles To Prevent A Global Recession
• Russia Cuts Off Gas To Poland & Bulgaria – European Gas Jumps 24% As Putin Starts Punishing “Unfriendly Countries”
• Some Of $3.4 Billion Weapons Sent To Ukraine Will End Up In Black Market – Others May Come Back To Haunt U.S. & Europe
• Ukraine Invasion – Putin’s Real Intention That Conventional Wisdom Have Failed To Comprehend
• U.S. Sanctions Fail – How Russian Currency Emerges Stronger Than Pre-War With A New Gold Standard
• Pay Gas In Ruble Or Else – Europe In Serious Trouble As Putin Retaliates Against Western Sanctions
• Bypassing US Dollar – India And Saudi Arabia To Turn To Chinese Yuan In Trades With Russia & China
• From Wheat To Oil & Gas – How Russia Invasion Of Ukraine Affects Europe’s Food Supply, And Even Your Loaf Of Bread
• China Creates Digital Currency – Here’s Why It’s A Big Deal To The World’s Economy, And A Big Problem For The U.S.
• Economic Destabilization – How China Prepares For American & Japanese Military Interference In Taiwan Conflict
• North Korea’s 10 Clever Tactics To Evade Economic Sanctions

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May 16th, 2022 by financetwitter

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