Cost of Formula: $1,500 a Year (and Why It Ran Out)

A newborn drinks about a can of powder a week and cannot switch brands without a stomach paying for it. That makes the cost of formula one of the least negotiable bills in a household budget, and in 2022 the country learned what happens when the supply behind it fails. This article covers what formula costs, who sets the price, why the shelves went empty, and why the fix that followed changed almost nothing.

What is the cost of formula per year?

A formula-fed infant takes roughly 25 to 32 ounces of prepared formula a day by the second or third month. A standard 30-ounce-plus tub of powder runs $35 to $50 at most retailers and makes about 200 ounces, so a baby goes through three to four tubs a month. That comes to $100 to $150 a month, or $1,200 to $1,500 across the first year (USDA-derived estimates, rounded). Bottles, nipples, and a sterilizer add a few hundred dollars up front.

Source: FFLW ranges from retail shelf prices, 2024–25, and USDA-derived annual estimates. Rounded, illustrative.

The last row is where families get hurt. Babies with cow's milk protein allergy or reflux get prescribed hypoallergenic formulas such as extensively hydrolyzed brands, which come in smaller cans at higher prices. A parent cannot shop that bill down. The pediatrician picked the product, the baby tolerates that product, and the register does the rest. Some state Medicaid programs and WIC cover medical formulas with paperwork; most private insurance does not.

Why is formula so expensive in the U.S.?

Because almost nothing competes with it.

Four manufacturers supply roughly 90% of the formula sold in the country. Imports barely register. Foreign formula faces a tariff of about 17.5% once quotas fill, plus FDA labeling and nutrient rules that most European products do not meet as written, even when their nutrition standards are equal or stricter. The result is that European brands parents order online at a premium cannot sit on an American shelf at a normal price. Any market with four sellers and a wall at the border prices the way you would expect.

Then there is WIC. The program serves roughly half of all infants born in the United States, and about half of all formula sold moves through it. Each state signs a sole-source contract with one manufacturer, which provides formula at a steep rebate in exchange for every WIC purchase in that state. The winner's cans get the shelf space, and the pediatricians, hospitals, and parents in that state default to the brand. Non-WIC parents pay full retail for the same can that the state buys at a discount. The rebate is a good deal for taxpayers and a moat for the contract holder.

What did the 2022 shortage expose?

That one plant was holding up the whole system.

In February 2022, Abbott recalled formula made at its Sturgis, Michigan plant after reports of infant illnesses tied to bacterial contamination concerns, then shut the plant down. Sturgis was one of the largest formula plants in the country and made Similac, Alimentum, and EleCare, including specialty formulas that had no substitute. Because Abbott held about 40% of the market and the WIC contract in a majority of states, the shutdown emptied shelves everywhere at once.

Datasembly, which tracks retail inventory, reported national out-of-stock rates above 40% by early May 2022 and above 70% in the hardest-hit states and weeks. Parents drove across state lines, rationed bottles, and posted photos of empty aisles. Hospitals admitted infants who had been fed watered-down formula. The federal government flew formula in from Europe under Operation Fly Formula, and Congress temporarily waived the tariffs and some of the labeling rules that had blocked those same imports for years. The plant restarted in June, shut again after flooding two weeks later, and restarted in July.

The shortage revealed the price structure by removing it for a few months. When foreign brands were allowed in, they arrived. When the tariff came back, they left.

Why didn't parents just breastfeed?

Most tried. The country made finishing hard.

CDC's Breastfeeding Report Card shows about 83% of U.S. infants start out breastfed. By six months, only about 25% are exclusively breastfed. The drop lines up with the return to work. The United States has no federal paid parental leave. BLS reports that about a quarter of private-sector workers had access to employer-paid family leave as of 2023, and the Family and Medical Leave Act guarantees only 12 unpaid weeks to about half of workers. A parent back at a warehouse or a hospital floor at week eight needs somewhere to pump, time to pump, and a refrigerator, and federal law on that is recent and unevenly enforced. Formula fills the gap the leave policy leaves. The bill for that gap is $100 to $150 a month.

This is the pattern across the whole cost of raising a child: the country skips the public support other rich nations provide and charges the household for the substitute. Infant care at $1,000 to $1,500 a month is the largest version. Formula is the smallest and the least escapable.

Did prices come down after 2022?

No. They went up and stayed there.

Formula prices rose through 2022 and 2023 along with the rest of the grocery aisle, and the four-company structure that let the shortage happen is still in place. Congress let the tariff waivers expire. The FDA published plans to diversify supply and streamline approvals for new entrants, but a manufacturer building a new U.S. formula plant faces years of regulatory review before a single can ships. The WIC sole-source contracts still concentrate each state's volume in one brand. Abbott, Reckitt, Nestlé, and Perrigo still hold the market. A family paying $150 a month in 2025 is paying for a system that has already failed once and has not been changed.

Every other line in a baby's first year works the same way. The diaper bill goes to a market dominated by two companies and taxed by about 20 states. The daycare bill goes to a center that loses money on infants because of staffing rules nobody funds. And the child tax credit that could offset all of it pays the least to the families who earn the least. Formula costs $1,500 a year because four firms, one tariff, and a set of state contracts decided it would, and because the parents paying it have no paid leave to choose otherwise. Shopping smarter cannot fix that. The system passes the cost down to the youngest household in the country.