Formula is unnecessary in children who are older than 1. At this age, children are expected to have a full/complete diet which may or may not include full cream fresh milk.
Fresh milk is the standard dairy recommendation for children older than 1 who are no longer breastfed, and the American Academy of Pediatrics actually recommends low-fat milk for ALL children (Except malnourished ones) older than 2.
As infant formula was originally designed to be a breastmilk replacement/alternative, children who have weaned naturally and no longer require breastmilk should not require formula either.
In most countries, formula sold is really only for babies 1 and below. It is only in countries like ours where the commercial demand is strong that formula manufacturers take advantage and try to create an even bigger demand through marketing, etc.
The average toddler formula is higher in calories than full cream fresh milk and this is not a good thing. These extra calories are usually from sugar and fat, not from any added 'special nutrients'. In fact, toddler and preschool formula is often the culprit in young children who are obese and who have poor diets. The typical caloric requirement for a toddler is 1000-1200 kcal/day and the majority of this should be coming from solid food. The recommended limit for dairy/milk intake for children older than 1 is 16-24 oz or 2-3 cups a day only. This means that a toddler taking 3 cups of milk a day will already consume 40-50% of his calories in milk, leaving 50% for food. Giving your child toddler formula almost always ensures that he/she will get more fat, sugar and calories than he/she needs.
Also, it is common for children who exceed the recommended milk intake to develop iron-deficiency anemia. This is because cow milk protein causes a little bit of bleeding in the gut and larger amounts of milk translates to bigger blood loss. Many parents don't know this but this is a common concern of well-trained pediatricians and is found in all our medical textbooks.
There is a lot more information available in books and online. If you look at the recommended Food Pyramid for children, you will see that there is no recommendation for formula here either.
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