Brazil's JBS, the world's largest meat processor, shut down plants in the U.S., Canada, and Australia on Sunday after being hit with a ransomware attack perpetrated by suspected Russian cybercriminals, JBS and the White House said Tuesday. The suspension of operations significantly disrupted supplies of beef, pork, and chicken in the Australia and North America, but JBS USA chief executive Andre Nogueira said late Tuesday that the company had made "significant progress" in restoring its servers, and "the vast majority of our beef, pork, poultry, and prepared foods plants will be operational" on Wednesday.
JBS is the majority shareholder of Pilgrim's Pride and the No. 2 meat producer in the U.S., and one day of JBS plant closures would take about a quarter of the U.S. beef supply offline, said Trey Malone at Michigan State University.
The U.S. is already seeing high meat prices due to rising demand and sporadic supply tied to the COVID-19 pandemic, Alton Kalo, chief economist at Steiner Consulting Group, told NPR News. How big an impact this ransomware attack has on consumer prices will "depend on whether the JBS issue is a one day or two day problem," or "if it goes on for a week or more." If it's a brief shortage, he said, meat wholesalers and retailers "may just absorb the hit or smooth it out over time" rather than raise prices.
The meat processing industry is heavily automated, and companies like JBS make ideal ransomware targets, Emsisoft cybersecurity threat analyst Brett Callow tells The Associated Press. "They play a critical role in the food supply chain and threat actors likely believe this increases their chances of getting a speedy payout." On the other hand, the meat industry is used to managing short disruptions, industry analyst Mark Jordan told AP, and U.S. consumers typically buy less meat between Memorial Day and the July 4 holiday.
After a ransomware attack on Colonial Pipeline led to panic buying and gas shortages in the Southeast earlier in May, the White House is taking this attack seriously, principal deputy press secretary Karine Jean-Pierre said Tuesday. The FBI is investigating the attack, she said, and the White House "is engaging directly with the Russian government on this matter and delivering the message that responsible states do not harbor ransomware criminals."