I asked at Safeway and the guy told me it's because people steal it and then try to return it for cash, not so much for starving babies. Same with the name brand laundry detergent that is now in a cage.

In the US, we have WIC (nutrition assistance for pregnant women, infants and children under 5) that covers formula for parents whose income is less than 185% of the federal poverty level. That does mean that parents who fall over the benefits cliff (make 186% of the fed poverty level) are seriously fucked.

This NYT article from 2005 says it's also stolen to cut drugs, but the bigger thing is reselling it for profit. https://www.nytimes.com/2005/06/05/us/baby-formula-the-locked-case-at-the-front-of-the-store.html