Leah Douglas

(Reuters) – The U.S. Department of Agriculture has announced Wednesday that it will temporarily pay for baby formula costs of low-income families who are dependent upon government discounts in countries where formula manufacturers Nestle SA (SIX) or Reckitt Benckiser Group’s Mead Johnson.

Access to infant formula is limited due to a persistent shortage. This has been especially true for those families who are part of the Special Supplemental Nutrition Program for Women, Infants, And Children (WIC) administered by USDA.

WIC consumers can usually only buy formula made by companies with a contract in place with their territory, state or tribe. WIC infants consume approximately 56% of national formula. [L2N2XF204]

Abbott Laboratories (NYSE) – The biggest WIC participant whose Michigan facility was shut down due to bacterial contamination severely exacerbated national shortage.

USDA stated that it will cover the costs of formulas not in stock in States with Reckitt and Nestle contracts. This is in accordance to authority given to USDA by the Access to Baby Formula law, signed on May 21 by President Biden.

On May 24, the agency wrote to all states that had Reckitt or Nestle contracts and encouraged them to collaborate with Nestle to achieve temporary flexibility in formula contracts to cover a greater range of their products, as well as those from their competitors.

Reckitt and Nestle didn’t immediately reply to our requests for comment.

Tom Vilsack, agriculture secretary, stated that WIC families depend on us to provide the essential nourishment they need for their children and babies. They cannot be let down.