JBS SA is starting to at least partially reopen all its empty beef plants in North America և Australia after a cyber-attack forced the world’s largest meat producer to shut down.
Late Tuesday night, the Brazilian food giant said it had made “significant progress” in tackling the attack and that “the vast majority” of its factories would be operational by Wednesday. The second shift at Gray, Colorado, one of the largest beef factories in the United States, was scheduled for normal production day, and factories in Texas, Nebraska and Wisconsin resumed part-time work, the company said in Facebook messages.
The Omaha plant will resume operations by Thursday, while one in Pennsylvania will return to normal, union leaders said. JBS reports that its Canadian beef factory in Alberta, one of the largest in the country, has resumed production. Workers at Australia’s Longford Beef Processing Plant were told the work would resume on Friday, according to a spokesman for the Australian Meat Industry Workers’ Tasmania.
Sunday’s cyber-attack prompted JBS to cut off all of its beef crop in the United States, which accounts for nearly a quarter of US stocks of “slow pork” and poultry. Slaughter operations have been halted across Australia, and at least one Canadian factory has been shut down. JBS, which has facilities in 20 countries, also owns Pilgrim’s Pride Corp., the second largest chicken producer in the United States. The extent of the failure may never be known because JBS did not detail the impact.
The onslaught, the subsequent cuts that toppled agricultural markets, raised concerns about food security as hackers increasingly targeted potential infrastructure.
Livestock futures in Chicago fell 3.4% near Friday, hitting a five-month low on Tuesday, before returning to 2.5% on Wednesday. Pork cuts in Chicago slipped 0.6%, dropping profit to 2.9% on Friday.
“Our systems are back online և We are sparing no resources to combat this threat,” JBS USA CEO Andre Nogueira said in a statement on Tuesday.
Fitch Ratings said on Wednesday that it did not anticipate an immediate impact on JBS’s credit rating from cyberattacks, and that further negative assessments following the attack were “highly unlikely, provided the company is able to return to normal operations in the near future.”
Shares of JBS fell 1.1% in trading in Sao Paulo, underperforming the 1% gain of the Brazilian Ibovespa benchmark index.
It is unclear what effect the latest attack on meat prices will have. Retailers do not always like to raise prices for consumers, they can try to resist, says Michael Nepweis, an economist at the American Farmers’ Federation. “As long as this continues, it will affect the level at which consumers start to see something in grocery stores,” he said in a telephone interview.
Food buyers fear that disruptions related to the JBS attack are already challenging the meat industry when prices are already high.
“It just adds more fuel to the fire,” said Anne Hurtado, a Chicago resident at Amigos Meat & Poultry who fears her JBS orders this week will not be shipped on time. “Over the past month, we have seen great inflation in the meat industry. “Demand was high, exports were high.”
Wholesale beef from the New York meat market rose 2% on Friday, said Kevin Lindgren, Commercial Director of Baldor Specialty Foods.
“There’s no craziness yet,” Lindgren said, although he expects prices to rise by 10% in a week. “The note will gradually increase as soon as it arrives.”
The JBS attack is pushing cheap meat back into the American system.
The industry is dominated by several titans, Tyson Foods Inc., JBS և Cargill Inc., which control about two-thirds of American beef. Even taking a few plants can disrupt the supply, as we saw last year when the Covid-19 outbreak outbreaks caused a shortage of meat across the country. The industry is so centralized that the shutdown of JBS factories meant that the US government on Tuesday was not allowed to release some of the key meat price data on which agricultural markets rely every day.
“Such attacks point to vulnerabilities in our country’s food supply chain, and they undermine the nation’s ability to diversify its meat processing capabilities,” said Sen. Thon Thun of South Dakota, one of the Senate’s second most powerful Republicans.
The JBS attack comes three weeks after Colonial Pipeline Co., the largest U.S. gas pipeline operator, was involved in a software attack attributed to a group called DarkSide. Experts say there is some evidence linking the group to Russia. This was followed by devastating crackdowns on US government agencies, businesses and health facilities, often blamed on Russian or Russian-based hackers during their pregnancy.
The notorious Russian-linked hacker group is behind the JBS attack, according to four people familiar with the campaign, who were not authorized to speak publicly about the issue. Cybergang is called REvil or Sodinokibi.
Russia has no information about the cyber attack, but has diplomatic relations with the US government, said Kremlin spokesman Dmitry Peskov. Cybercrime issues will be on the agenda of the June 16 summit between Presidents Joe Biden and Vladimir Putin.
Since May 2020, there have been more than 40 publicly reported spyware attacks against food businesses, said Allan Liska, chief security architect at Recorded Future, a cybersecurity analytics firm.
“It’s terrifying to see how many hackers, cyberattacks, are infiltrating the US infrastructure,” said Texas Republican Kevin Brady in an interview with Bloomberg television. “Through our entire supply chain, we need to think about each and every part of our economy to find out where those cyber vulnerabilities may be.”