Infant Formula and The Big Four: The Striking Similarities When ‘Shortages’ Occur
As a mom, the thought of not having enough food for my baby is beyond frightening.
Headlines of the ‘infant formula shortage’ continue to increase and I hear of parents driving hours out of their way to find certain formula for their children. Disheartening, to say the least, especially when it effects children less than 12 months of age that have no power over what their bodies can and cannot digest.
According to Datasembly’s recent release, “The nation-wide out-of-stock percentage is now at 43% for the week ending May 8.”
Datasembly’s CEO, Ben Reich continues, “This issue has been compounded by supply chain challenges, product recalls and historic inflation. The category started to see stocking challenges beginning in July 2021 and the situation has continued to worsen into 2022.”
Here’s the kicker: This ‘shortage’ in baby formula is strikingly similar to issues within the beef industry.
Obviously, the phrase ‘supply chain issues’ has become a common topic of discussion in recent years. We saw it when COVID hit and we have been feeling the impacts since.
‘Shortages’ of a product can be caused by a variety of reasons. The product itself is not being made in quantities that meet demand, transport issues that lead to a product not being available when and where it should be and stockpiling by consumers to name a few.
Now, here’s where it gets interesting.
A majority of the market share of infant formula is owned by two companies. When a recall in Feb. 2021 occurred on one company’s products, supply instantly decreased. The instant 'shortage' caused formula prices to increase and fear in the marketplace that causes parents to stockpile and pay nearly anything to get what their child needs.
See the similarities?
Beef processing was slowed during COVID. Prices rose at the store. People began stockpiling. The ‘shortage’ was multiplied by consumer buying habits based on fear in market availability.
According to a recent U.S. Department of Health and Human Services release, “President Biden spoke with retailers and manufacturers, including Walmart, Target, Reckitt, and Gerber, to discuss ways to get more formula quickly and safely onto store shelves. He also announced a series of actions, including cutting red tape on the types of formula parents can buy…”
Could the ‘red tape’ have been cut during the pandemic to decrease the issues we saw in the beef supply chain?
Hindsight is always 20/20, but could local processors have played a more influential role in providing beef for consumers in stores during the pandemic? Is Biden’s funding for small and medium processors too late and will we need to see a large disruption like the pandemic before these smaller plants can claim any market share?
During the pandemic, some consumers began to turn to local producers to meet their beef demands. Unfortunately, parents needing baby formula have a harder time finding an equal or more premium option to turn to. In addition, as supply of formula is replenished, will prices go back down to previous levels? Or will prices stay high as parents are willing to pay for the product at whatever cost, simply because there are no alternatives?
At the end of the day, consumers want to feed their families with safe, nutritious food.
As producers, how do we continue to help ‘cut the red tape’ to ensure premium quality beef gets to consumers efficiently and without disruption?
