How the skyrocketing cost of baby formula is hurting families who can least afford it

People are having to pay more for baby formula in Canada and that’s putting pressure on families who can’t afford to shoulder those cost increases.

A prominent infant food insecurity expert says it’s a long-term problem that’s getting worse.

“If you’re a very low-resource family, where you’re relying often on food-charity responses, then those babies, I would say, are some of the most food-insecure Canadian citizens,” said Lesley Frank, a Canada research chair in food, health and social justice at Nova Scotia’s Acadia University. “Because they only eat that one thing.”

Consumer Price Index data from Statistics Canada shows that infant formula prices were up 11.8 per cent in March 2023 compared to a year earlier. That’s higher than the rate of inflation. 

The increase echoes reports from parents who say they are paying ever-higher prices for formula in various regions of the country, including Atlantic Canada, Ontario and Canada’s North.

‘You need to feed your baby’

While infant formula may cost more, families who need it don’t have a choice but to pay the higher prices.

Opher Baron, a professor of operations management at the University of Toronto’s Rotman School of Management, says formula is an example of inelastic demand, because while the price may go up, demand doesn’t shrink accordingly.

“You need to feed your baby and you’re going to buy it,” said Baron, noting inelastic demand is often associated with goods like formula that are important.

Acadia University’s Frank said families struggling to pay high prices for formula can end up having to make choices that may impact their babies or families.

“It can mean that the formula for the baby becomes a priority and nobody else eats very much,” said Frank, who spoke to CBC News from the United Kingdom, where rising formula prices are also raising concerns.

Meanwhile, Bloomberg News reports that formula prices hit a record high in the United States last month.

Frank points out that the high cost of formula and what it means for families has been “a longstanding story in Canada.” 

CBC Radio’s Cost of Living has previously reported that baby formula prices have typically doubled every 10 to 15 years in Canada.

Multiple challenges

But why are Canadians paying more for this critical product now?

There are a number of factors challenging production of infant formula recently, including general supply chain issues that emerged over the course of the pandemic. Canada had already been dealing with a shortage of formula, which industry and government officials have reported to be improving.

Michi Furuya Chang, senior vice-president of public policy and regulatory affairs for the Food, Health and Consumer Products of Canada industry group, said another factor is a shortage of sunflower oil, which is often a key ingredient in formula.

Ukraine is one of the world’s top producers of sunflower oil, but the ongoing war with Russia has disrupted the supply.

Furuya Chang said that means manufacturers have had to adjust their formulations and noted that manufacturers don’t control the price retailers charge consumers.

A handful of infant food manufacturers CBC reached out to either declined to comment or did not respond to requests for comment.

Frank says more needs to be done to ensure those who need formula can get it and notes that families are often under the greatest financial strain when children are very young.

While there are some government-provided tools like the Canada Child Benefit that can help families with the high cost of living, Frank feels ashamed watching families trying to cope with high prices and seeing formula locked up in some stores.

“It’s just heartbreaking to me that this is what’s happening.”