Can You Buy Formula On Food Stamps – Washington is worried about the baby boom industry, but the government has helped keep it going.
A typically full stock of milk sits heavily in a San Antonio store, Tuesday, May 10, 2022. | Photo by Eric Gay/AP
Can You Buy Formula On Food Stamps
The uproar over infant formula shortages is prompting lawmakers to grapple with how a federal nutrition program could help the few retailers that dominate the U.S. market.
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The federal government’s Universal Nutrition Program for Women, Infants and Children, known as WIC, is by far the largest consumer of milk in the United States, with about half of all baby milk in the United States going through it. that program. And just two agencies serve nearly 90 percent of the infants who receive benefits through the program, in part because of the way WIC contracts.
Now lawmakers, especially Democrats, are not doubting that fact as they try to prevent another outbreak of such infanticide, in part due to the shutdown of one Michigan plant in February. They believe, however, that Congress doesn’t have the time or political will to tackle major reforms now, instead focusing on immigration legislation that would put in place emergency measures to protect millions of WIC recipients from being recalled or missing out.
He said, “It is unfortunate that in this country, we have a problem of lack of baby milk. I think we need to respond to that and reevaluate how we’re going to draft this agreement,” said Rep. Jahana Hayes (D-Conn.), one of the sponsors of the legislation, along with Rep. Michelle Steel (R-Calif.) and the chair. Education and Labor Bobby Scott (D-Va.). On Wednesday evening, the House passed the WIC bill in an unusually bipartisan vote of 414 to 9. Lawmakers also approved a $28 million spending bill to help the FDA restore stockpiles and strengthening food security.
Rep. Jahana Hayes (D-Conn.) speaks during a press conference on the introduction of legislation to help Americans with child shortages nationwide at the U.S. Capitol on May 17, 2022 in Washington, United States | Anna Moneymaker/Getty Images
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Abbott Nutrition has closed its plant in Sturgis, Mich. Four sick children are in the hospital; two died. The company also voluntarily released some of its locally made formula, including Similac, after the FDA found a serious food safety issue at the plant. Abbott was estimated to control about 40 percent of the U.S. milk market before the recall, and the Sturgis plant was said to be responsible for about a fifth of the U.S. milk supply. .
In addition to Abbott, three other milk producers dominate the domestic market: Mead Johnson, and, to a lesser extent, Nestle and Perrigo. Together, the four companies control nearly 90 percent of the US formula market.
Abbott recalled that the missing results were particularly disturbing to WIC recipients. About half of all babies born in the United States qualify for WIC, which serves poor families. Many of these households do not have the time or resources to drive around looking for alternative formulas or search the Internet for available stores. Although parents and caregivers may have access to other options, their WIC benefits may not include a specific label that they may have received when poverty began.
For the past three decades, WIC has operated a so-called single-source, cost-savings program that allows the government to purchase milk at below retail prices. The National WIC Association estimates that the rebate would save the state about $1.7 billion annually. When a state contracts with a company, all WIC participants in the state use that same plant. Only three companies have been awarded contracts at this time: Abbott Nutrition; Mead Johnson, maker of Enfamil; and Nestle, which makes Gerber.
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A source from the National WIC Association says Abbott is leading the deal with 49 WIC contracts with state, county and family organizations. This means about 47 percent of the 1.2 million children receiving formula benefits through the WIC program. Mead Johnson has 15 WIC contracts, including major states like Florida and New York, serving 40 percent of the children who receive benefits from the program.
The Department of Agriculture has since relied on disease officials to essentially eliminate the WIC contract and allow organizations to use its benefits to buy all available milk — a move that means Abbott Nutrition pays for competitors’ milk in contract states. The current WIC bill will underwrite aid agencies in the future, according to Hayes.
“The dirty secret about WIC is that these dairy companies are losing money on the formula they sell through WIC,” explained the former Democratic Senate aide. “But what happens is … if you feed in a hospital and ask for formula, you’ll get formula from anyone who has a WIC contract,” giving milk producers access to a large pool of new customers. Getting a state WIC contract can also mean a better selling position for retailers around the world and loyalty.
Not everyone agrees that market agreements alone have led to consolidation in the milk industry, as well as other factors, such as general food consolidation and higher food regulatory fees, since baby milk it is ordered more than most other foods.
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“It’s hard to say how much of that change is due to the WIC policy,” said Charlotte Ambrozek, an economist at the University of California, Davis, who specializes in food assistance programs. Ambrozek said that there really hasn’t been much research into the issue of contracts and how they affect the prices of non-WIC products and other related issues.
But the USDA’s Center for Economic Research found in 2011 that changing the state WIC contract gave the new company about 74 percent of the state’s market share. Most of those results are for WIC participants in exchange — since they make up more than half of the market — but the rest are results of good health care at the retail level.
The Center on Budget and Emergency Management states that “High visibility may increase purchases among consumers who do not participate in WIC.” “These results are important because the industry receives about 20% more revenue from each can of powder sold to a non-WIC consumer than from a can purchased through WIC,” he said.
Hayes called sole proprietorship contracts, and the market advantages they bring, “a big problem that most Americans don’t even know about.” But he also says that resolving the deal “would require a lot more reform,” than what Congress is currently proposing.
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Part of the reason is that WIC was authorized under the so-called Care for Children Act, which Congress used to revise every five years, but failed to address for more than a decade as school meals and other issues in the bill became increasingly partisan. Leaders of both the House and Senate had said they wanted to fight the authorization this year, but that work stalled as Capitol Hill tried to advance Biden’s tougher bill and social spending. After that, the committee did not deal with the matter again.
The WIC program itself has received significant bipartisan funding over the years, given the breadth of families and regions it serves — and because it can improve child health outcomes, it saves money in the long run. There have, however, been efforts in recent years to reform key parts of the WIC program, including reforming the program’s food coverage, expanding benefits through EBT cards and, possibly, allowing online WIC purchases. The baby deal was about to be found in the political conversation, until a crisis occurred.
Brandon Lipps, Trump’s former USDA administrator, helped steer WIC and other nutrition programs through the pandemic and the recession — when families relied heavily on WIC for their children’s nutrition.
“WIC is a very important program to ensure that all mothers and children have adequate nutrition and, in fact, get the best start in life. I think people on both sides realize that,” Lipps said.
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Lipps added a two-pronged bill that provides necessary and limited provisions for future administrations that deal with issues such as recalls and shortages. He pointed out that there is no quick policy or political solution to the issues related to state contracts that only come from the contract and said that “finger pointing” in Congress “is a distraction.”
“When you get outside of this two-dimensional project, you see traffic in a lot of different directions,” Lipps said. “As lawmakers are eager to talk about how they can improve WIC, I think there’s a lot of time in the coming months.
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