South Iowa News

U.S. Representative Zach Nunn (IA-03) has introduced bipartisan legislation aimed at preventing future infant formula shortages. The Investing in New Families and Newborns Through (INFANT) Tax Credit Act, co-led by U.S. Representative Chrissy Houlahan (PA-06), seeks to diversify the formula supply chain by supporting small-sized manufacturers based in the United States.

“Just two years ago, millions of parents were scrambling to feed their babies – some even traveling miles or paying out-of-this-world prices just to get the formula their child needed,” said Rep. Nunn. “We may be past that crisis now, but we should work to stop this from ever happening again. By supporting small-sized American manufacturers, we can prevent another shortage and keep children fed and happy.”

In May 2022, the infant formula shortage reached critical levels with nationwide out-of-stock rates hitting 70%, primarily due to a pandemic-induced supply chain disruption and a February 2022 recall from a facility responsible for producing 43% of the total U.S. consumption of formula. This led to an immediate spike in out-of-stock levels from 11% in December 2021 to 25%, which continued rising into the summer.

“It wasn’t long ago that the infant formula crisis had parents across America worried about meeting their babies’ nutritional needs,” said Rep. Houlahan.“While that immediate concern has abated, we must address weaknesses in our supply chain to ensure we never find ourselves with empty shelves of infant formula again. One way we do that is by supporting small, domestic infant formula manufacturers. Creating tax credits for these manufacturers would promote competition, sustain production growth, and ensure greater access to infant formula options for families nationwide."

Infant formula is one of the most highly regulated foods in the U.S., with oversight akin to pharmaceuticals rather than food products. High barriers to entry have meant no new manufacturer registrations with the FDA for 15 years until recently.

“ByHeart is proud to support the INFANT Tax Credit Act—an important step in fortifying our country’s supply chain to help prevent future infant formula shortages and ensure that families never have to worry about finding formula for their babies again,” said Ron Belldegrun, ByHeart Co-Founder and CEO.

The INFANT Tax Credit Act proposes creating a transferrable tax credit for small domestic infant formula manufacturers equal to 25% of their qualified investment annually. It also includes a production tax credit offering $1.50 per pound of produced infant formula.

Additionally, it mandates that the Secretary of Agriculture develop a plan ensuring existing business development programs at the Department of Agriculture encourage competition within the infant formula supply chain.

Text of the bill can be found here.

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