JBS to reopen most operations after cyberattack shut all its US beef plants

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JBS Foods, the world’s largest meat supplier, said it has made “significant progress in resolving the “cyberattack” that shutdown all of its US beef plants on Tuesday, easing fears of further meat price increases. 

The “vast majority” of the company’s plants are expected to reopen on Wednesday, JBS USA CEO Andre Nogueira said in a statement Tuesday evening.

But even one day’s disruption could affect wholesale beef prices, analysts warned. 

JBS, which controls about 20 percent of the slaughtering capacity for cattle and hogs in the US, had halted cattle slaughter at all its US plants on Tuesday, union officials said. Operations in Australia and Canada were also affected, according to union officials.

“JBS USA and Pilgrim’s are a critical part of the food supply chain and we recognize our responsibility to our team members, producers and consumers to resume operations as soon as possible,” Nogueira said. “Our systems are coming back online and we are not sparing any resources to fight this threat.”

It remains unclear who orchestrated the hacking of JBS, but Karine Jean-Pierre, a White House deputy press secretary, told reporters on Air Force One on Tuesday that it was a ransomware attack. 

She added that the ransom demand had come from “a criminal organization likely based in Russia.”

Ransomware is a malicious software that locks up a user’s data. In ransomware attacks, the hackers demand a ransom for the unlocking or return of the affected data.

It’s the second such attack to strike a piece of critical US infrastructure in recent weeks. Last month, the operator of the biggest US oil pipeline was similarly paralyzed by a cyberattack orchestrated by the Russia-based criminal group DarkSide. That attack had a sweeping effect on Americans, sending gas prices soaring and spurring panic buying across the Southeast.

The FBI is investigating the hack, the White House’s Jean-Pierre said, and the Cybersecurity and Infrastructure Security Agency is also involved.

“The president has directed the administration to determine what we can do to mitigate any impacts as they may become necessary,” she said Tuesday.

Analysts at Daily Livestock Report noted Tuesday that the meat supply chain in the US is already “extremely tight.” US prices of beef and chicken have soared in recent months amid shortages and surging demand as the restaurants and the broader economy reopen.

“Retailers and beef processors are coming from a long weekend and need to catch up with orders and make sure to fill the meat case,” the analysts wrote in a report. “If they suddenly get a call saying that product may not deliver tomorrow or this week, it will create very significant challenges in keeping plants in operation and the retail case stocked up.”

If JBS operations can’t quickly bounce back, the analysts warned, it “could add gasoline to an already large flame.”

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