will go through over 3,000 diapers in a single year.

At around 70 to $80 a month,

the cost of these diapers

will set a family back nearly $1,000 a year.

And right now, this essential is getting more expensive

for millions of Americans.

In March, diaper manufacturer Kimberly-Clark announced

that it would be raising prices on many

of its products, including diapers.

And then competitor Procter & Gamble announced

it would be doing the same.

For families with multiple children,

these price hikes could add up to hundreds

of dollars more per year.

- These price increases are happening

on household goods, on food, on gas.

Not only is it an amount that adds up,

it's an amount that comes in addition

to everything else costing more.

- [Carter] So what's causing diaper prices

to rise so dramatically?

It has a lot to do with the prices

you're seeing here, and here.

(lively music)

♪ I'm a big kid now ♪

- [Narrator 1] Parents are more likely to choose Luvs.

- [Narrator 2] Pampers, the number one

pediatrician recommended brand.

- [Narrator 3] We're Huggies, we've got just what you need.

- [Carter] It may look like there are a lot

of options to buy diapers

but in reality, there are less

than what it may seem.

Only two companies control about 80%

of the US disposable diaper industry:

Procter & Gamble and Kimberly-Clark.

The same two companies

that announced price hikes earlier this year.

- It means these companies

are less vulnerable to competition.

- [Carter] Sharon Terlep reports on consumer products

for The Wall Street Journal.

- If P&G makes a decision on pricing,

that might drive the whole market,

whether it's up or down.

They don't have the concern as much

of having higher prices

and then having their customers go somewhere else.

- [Carter] Most disposable diapers are made

with layers of blended materials

to increase absorbency,

including this fluffy part,

which is made from wood pulp.

Just a few months ago,

lumber prices were through the roof,

powered by low mortgage rates

and demand for home improvement projects

that drove a suburban building boom.

This lifted the price of wood, including pulp,

which in turn drove up costs for diaper manufacturing.

- Costs of logging have escalated due

to the inputs at that stage in the value chain,

namely the labor and the logistics

and the equipment associated

with felling trees.

- [Carter] David Garfield is a consultant

who has worked in the consumer products industry

for almost three decades.

- And those increases in costs

do ripple through the production of pulp and paper.

- [Carter] But one of the biggest commodities

driving the price of diapers is the same one

that is running your car.

- Oil price is soaring,

an OPEC-fueled rally sending crude prices higher,

now up about 20% just over the last month.

- [Carter] As prices have risen at the pump,

so have costs to produce diapers.

- Some of those ingredients or materials

that are incorporated into diapers

are derived from petroleum.

And so with the increase in price

of the barrel of oil comes an increase

in the material that goes into making diapers.

There's also the knock-on effect

of diesel fuel prices up,

which impact the transportation costs,

as well as the material costs.

- [Carter] Petroleum or crude oil

is the same raw material used

to make sodium polyacrylate.

This is a polymer that's used in diapers

to help make them more absorbent.

It's what these absorption beads are made out of.

Back in February, a winter storm pummeled Texas,

forcing many petrochemical manufacturing plants

to shut down, including those

that make acrylic acid,

a compound in sodium polyacrylate.

The extreme weather caused acrylic acid shortages

for months, which drove up the price

of sodium polyacrylate.

This contributed to the rising costs of diapers.

- Part of it was this piling-on effect.

It was just one more thing on top of everything else.

But it made this material harder to come by

and so at the time

when I spoke to Kimberly-Clark,

they said it's not driving a shortage

but it's certainly limiting options.

- [Carter] But it wasn't just limited access

to raw materials that have driven up diaper prices.

Throughout the pandemic, ongoing shipping issues due

to a surge on online orders, COVID restrictions,

and driver shortages have caused significant delays

across the US.

This has impacted deliveries across industries,

including diapers, which has caused

freight costs to balloon.

- You have the trucking rates, the labor for drivers,

the equipment that needs to be maintained and replaced,

even the insurance costs.

So producers are seeing significant increases recently

in overall transportation costs.

- [Carter] Diapers, unlike some other

smaller personal care items,

are impacted more by shipping costs

due to the product's bulky size.

- The vast majority of diaper production

in the US is local.

There's a very, very small percentage that is imported.

It's a highly, what they call, volumetric product,

meaning that per dollar of sales,

it's expensive to ship.

And so it's largely trucking transportation

within the US from the factories

to distribution centers

and ultimately through retail channel partners.

- [Carter] Still, there's one other factor

affecting the price of diapers

that has been trending for years.

In the US, births have been steadily dropping

for the past decade.

The number of babies born in 2020 dropped by 4% compared

with the previous year,

partially driven by a trend

of women choosing to have fewer children later in life.

- As the birth rate declines,

it has an instant effect on diaper sales

because babies need diapers the minute they're born.

So if there's fewer babies born,

it's not some products

where 10 years down the road,

a smaller population might trickle down.

If fewer babies are born in 2020,

diaper sales go down in 2020.

- [Carter] To make up for lower diaper sales,

companies have increased prices

to partially fill the gap.

- To offset this decline in birth rate,

the companies are trying

to basically sell more expensive diapers

that are nicer diapers.

So that competition has become more intense.

There's more organic diapers.

There's a lot of features in diapers now

that didn't exist 10 years ago.

- [Carter] As diaper prices have increased,

for many working families,

the financial strain has added to a list

of growing expenses.

- The need in 2021 seems

to be almost as high or higher as it was in 2020.

So even as the economy's recovering,

it's not going back to 2019 levels.

- [Carter] Experts like David Garfield say

that even if commodity and shipping costs come back down,

because of increased margins,

diaper price increases will likely stay inflated

for the near future.

(lively music)