JBS SA is beginning, at the very least, to partially reopen most idle beef plants throughout North America and Australia after a cyberattack forced the world’s largest meat producer to halt operations.
The Brazilian food giant said Tuesday afternoon that it had made “significant” progress in resolving the attack and that the “vast majority” of its plants would be operational by Wednesday. A second shift at the Greeley, Colorado facility, one of the largest beef plants in the United States, was set for a day of regular production, while plants in Texas, Nebraska and Wisconsin resumed partial operations. , according to the company’s posts on Facebook.
On Thursday, an Omaha plant will resume operations, while a Pennsylvania plant will return to normal, union leaders said. JBS said its Canadian meat factory in Alberta, one of the largest in the country, has resumed production. Workers at the Longford meat processing plant in Australia have reported that operations will resume on Friday, according to a spokesman for the Australian Meat Industry Employees Union in Tasmania.
Sunday’s cyberattack forced JBS to shut down all of its beef plants in the United States (accounting for nearly a quarter of U.S. supplies) and to curb pork and poultry production. Slaughter operations across Australia were halted and at least one Canadian plant was idling. 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 outages may never be known, as JBS did not detail the impact.
The attack and subsequent shutdowns brought down agricultural markets and raised concerns about food security as hackers increasingly turn to critical infrastructure.
Live cattle futures in Chicago had fallen to 3.4% from Friday’s close to near the five-month low on Tuesday, before recovering on Wednesday to 2.5%. Pork cuts fell 0.6% in Chicago, reducing gains from Friday to 2.9%.
“Our systems are back online and we are not saving resources to combat this threat,” Andre Nogueira, executive director of JBS USA, said in a statement on Tuesday.
Fitch Ratings said Wednesday that it does not anticipate any immediate effect on JBS’s credit ratings for cyberattacks and considers the future implications of negative ratings for the attack to be “highly unlikely, as long as the company can return to normal operations in the short term. time limit”.
Shares of JBS fell 1.1% in Sao Paulo operations, yielding less than 1% of Brazil’s Ibovespa benchmark.
It is unclear what the impact will be on meat prices from the latest attack. According to Michael Nepveux, an economist at the American Farm Bureau Federation, retailers don’t always like to raise consumer prices and may try to resist. “The time that elapses will affect the extent to which consumers begin to see something in grocery stores,” he said in a telephone interview.
Food buyers fear that JBS outages will tackle problems that already challenge the meat industry when prices are already high.
“It just adds more fuel to the fire,” said Anne Hurtado, a Chicago-based buyer of Amigos Meat & Poultry, who fears her orders for this week’s JBS won’t be shipped on time. “We have seen a lot of inflation in the meat industry in the last month. Demand has been high, exports have been high.
Wholesale beef prices from the New York beef market are up up 2% from Friday, said Kevin Lindgren, director of merchandising at Baldor Specialty Foods.
“Still nothing crazy,” Lindgren said, though he expects prices to be 10 percent higher in a week. “It will gradually increase as the pressure comes.”
The JBS attack is driving the American system of getting cheap meat out of the spotlight.
The sector is dominated by a handful of titans (Tyson Foods Inc., JBS and Cargill Inc.) who control about two-thirds of American beef. Removing even some plants can disrupt supply, as was seen last year when Covid-19 outbreaks slowed plants and caused meat shortages across the country. The industry is so concentrated that the slowdown in JBS plants prevented the U.S. government from publishing some key data on meat prices that agricultural markets rely on on a daily basis on Tuesday.
“Attacks like this highlight vulnerabilities in our nation’s food supply chain security and underscore the importance of diversifying the country’s meat processing capacity,” said U.S. Sen. John Thune of South Dakota, the second most powerful Republican in the Senate.
The JBS attack comes three weeks after Colonial Pipeline Co., the largest pipeline operator in the United States, was targeted by a ransomware attack attributed to a group called DarkSide. Experts have said there is some evidence linking the group to Russia. This happened a series of devastating piracies against US government agencies, companies and health facilities, often guilty of Russia or Russian-based hackers at a time full of relations between the countries.
A famous piracy group linked to Russia is behind the JBS attack, according to four people familiar with the campaign who were not allowed to speak publicly on the subject. The cyberangle is called REvil or Sodinokibi.
Russia has no information about the cyberattack, but is in diplomatic contact with the U.S. government, according to Kremlin spokesman Dmitry Peskov. Cybercrime issues will be on the agenda at a June 16 summit between Presidents Joe Biden and Vladimir Putin, he said.
There have been more than 40 publicly reported ransomware attacks against food companies since May 2020, said Allan Liska, senior security architect at cybersecurity analysis firm Recorded Future.
“It’s terrifying to see how many hackers and cyberattacks are coming to the United States and critical infrastructure,” Texas Republican Rep. Kevin Brady told David Westin in an interview with Bloomberg TV, adding that companies and governments must work together to defend themselves from these attacks. “We need to reflect on our entire supply chain in all critical parts of our economy and identify where these cyber weaknesses might be.”