Food supply chain, like credit card transactions, are vulnerable to cyber attacks. While the JBS attack has been temporarily halted, supermarket chains like Walmart, Costco, and Sam’s Club are pulling meat from their shelves and suspending deliveries, and some cattle farmers are even expected to lose their livelihood. The attack on JBS, one of the largest beef-producing companies in the world, is just the latest in a string of food-related cyber attacks.
The recent global cyber attack on Brazil’s largest meat packer, JBS, had a ripple effect up and down the food chain. While the company has vowed to bounce back, a number of smaller Brazilian food companies are shuttingtered after bank accounts were frozen and computers shut down. Meanwhile, the attack highlighted the vulnerability of the global food supply to the growing threat of cyber attacks. As the U.S. and China compete for the world’s food supply, a cyber attack on food supplies can have catastrophic results.
A ransomware attack on JBS SA JBSAY -0.33 caused a shock to the US food industry and increased tensions between Washington and Moscow, even though the meat plant has resumed operations. JBS said most of its factories resumed operations on Wednesday, although some shifts and treatments remain suspended, according to social media posts from individual factories. We expect all of our global operations to be close to capacity tomorrow, said Andre Nogueira, CEO of JBS Americas.
Today’s headlines, news in context and good reads you may have missed with Tyler Blint-Welch. The White House, which informed JBS that the attack came from a criminal group likely based in Russia, said President Biden planned to discuss the ransomware issue during a summit with the Russian president. Vladimir Putin in Geneva at 16. June. When Bauer was asked at the White House on Wednesday if he plans to retaliate against Russia in response to the cyber attack, he said he would. Biden: We are working intensively on this subject. Russian officials did not immediately respond to a request for comment. The attack on JBS this week halted production at plants that process nearly a quarter of the beef produced in the U.S. and a fifth of the pork, raising wholesale meat prices and making it harder to get cattle to farms. Operation of chicken farms Pilgrim’s Pride Corp. A subsidiary of the Brazilian company JBS, the largest meat company in the world in terms of turnover, was also affected. Florida-based supermarket chain Publix Super Markets Inc. said the plant closures could lead to temporary shortages of chicken in the coming days. These disruptions are the latest blow to the meat processing sector, which is also facing labour shortages and high transport and feed costs. Wholesale prices for beef and pork rose after the attack, and meat buyers said higher consumer prices are likely to follow if the problems persist. Prices for packaged beef rose $5.60 Wednesday to $340.16 per 100 kg, the biggest increase in at least a month, according to the U.S. Beef Marketing Board. Ministry of Agriculture Data. We recover goods from all other sources. – Jagtar Nijjar, Sales Manager, Gordon Food Service John Stevens, director of purchasing at G&C Foods, a supplier to restaurateurs, said he expects prices to rise further if the closures continue. The longer this goes on, the more we will see, he said. Stevens said Tuesday that he was getting calls from restaurant owners trying to find alternative sources for the beef, pork and chicken they usually order from JBS and Pilgrim’s. G&C, which buys millions of pounds of meat and poultry from companies each year, has been buying meat from other meat packers and may reduce deliveries to customers if supplies are reduced in the coming days, he said. The volume you need is limited, Stevens said. He said JBS has informed him that the already pending meat orders will be delivered, but it is not known if and when the other outstanding orders will arrive. JBS said nearly all of its U.S. plants delivered Tuesday. The USDA said it has contacted several large meat processing plants to encourage them to increase capacity where possible. The agency said it will continue to encourage U.S. agribusinesses to take steps to protect their information technology and supply infrastructure. Meat deliveries were already limited before the cyber attack. Rising demand from newly opened restaurants and production problems in meat processing plants are driving up the cost of bacon, chicken wings and other products as people continue to make large food purchases. As a result, some restaurants and supermarkets have raised prices for consumers. Distributor Gordon Food Service Inc. bought meat from other suppliers Tuesday while the JBS plants were out of business, said Jagtar Nijjar, Gordon’s director of imports and commodities. Nijjar said he expects JBS to take four working days to resume a normal flow of orders. Normally, he says, Gordon buys more than half his pork from JBS, at least half a million pounds a week.
Melbourne, Australia, home of JBS, the world’s largest meat company by sales.
Photo: Carla Gottgens/Bloomberg News We intercept goods from all other sources, Nijjar said. Meanwhile, beef producers in the United States said they were waiting to see if they would be able to deliver animals to JBS’s plants on time this week. According to the USDA, U.S. beef companies slaughtered 105,000 cattle and 439,000 hogs on Wednesday, down 13% and 9%, respectively, from the previous week. Dave Stephenson, general manager of Red Rock Feeding Co. in Red Rock, Arizona, said he wasn’t sure if he would be able to bring more than 70 head of cattle to the JBS plant near Phoenix as planned Friday. He said the animals he sent to the JBS plant in Utah on Monday were still waiting to be slaughtered on Tuesday. The international union United Food and Commercial Workers, which represents more than 25,000 workers at JBS’s meat processing plants, has called on the company to ensure that all workers continue to receive their wages during the closure of the plants. A spokesman for JBS said the employees will be paid according to the terms of their contract with the company. The cyber attack also affected JBS’s operations outside the United States. The company’s Canadian beef plants resumed normal slaughter and processing operations Wednesday, the company informed employees in a statement posted on Facebook. Several thousand workers in Australia’s meat industry temporarily laid off work Wednesday as JBS seeks to bring production back to full capacity, said Matt Journo of the Australasian Meat Workers Union. They have no idea when the problem will be solved or when it will end, he said. JBS Australia uses the same computer system as the company in the United States, so operations in both countries have been affected, the JBS chief executive said. David Littleproud, the country’s minister of agriculture. Mr Littleproud said the attack had disrupted the processing of beef, lamb and pork. He said this was the latest blow to Australia’s meat industry after a prolonged drought reduced livestock numbers. JBS is responsible for about a quarter of Australia’s red meat production. It’s also important to understand that it’s not just APS that is affected, but the farms as well, and of course they are working hard to keep the supply chain going, Littleproud said. Australian authorities are consulting with U.S. prosecutors to determine the source of the attack, Littleproud said. A cyberattack on the largest fuel pipeline in the U.S. lost fuel on May 7, raising gasoline prices and causing shortages in parts of the Southeast. The WSJ explains how vulnerable the country’s critical energy infrastructure is to attack. Illustration photo: Liz Ornitz/WSJ
Companies exposed to cyber attacks
Other WSJ hacking stories selected by the editors. -Tarini Partee and David Winning contributed to this article. E-mail Jesse Newman at [email protected] and Jacob Bunge at [email protected] Copyright ©2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8