USDA Says Cyberattack at JBS Is Unlikely To Disrupt Food Industry

Kimberly Redmond  |

Video source: YouTube, WMAR-2 News

After this past weekend’s ransomware attack temporarily halted operations at JBS SA (OTC: JBSAY), the US Department of Agriculture (USDA) said it is unlikely that the pause will cause major disruptions to the industry. 

The USDA told The Hill on Thursday that its daily production data shows “a strong rebound in cattle and hog slaughter” and that overall “the market is moving toward normalization.”

“If the situation continues to resolve quickly, we don’t expect this incident to have lasting effects on wholesale and retail prices,” the USDA said.

JBS is the world's largest meat processing company by sales, according to The Wall Street Journal. The company has plants in 20 countries and also owns Pilgrim’s Pride Corp, the second-biggest chicken producer in the US, according to Bloomberg.  

Sunday’s cyberattack forced the Brazilian food giant to shut down all of its beef plants in the US — which account for almost a quarter of American supplies — and slow production of pork and poultry. 

The majority of plants resumed operations Wednesday, but analysts believe the brief shutdown of JBS plants will have a limited, short-term impact on meat availability and prices, which are still expected to increase as the US economy continues to recover from the pandemic, The Hill reported.

Industry experts told NPR that companies can usually make up for lost production with extra shifts if a plant is closed for a day or two, but a closure that runs closer to a week would be more serious, especially for a key supplier such as JBS.

According to the USDA, the White House has also pushed other meat producers in the US to help fill any void left by the production pause and to take “necessary measures to alleviate price increases or shortages.”

On Wednesday, the Federal Bureau of Investigation identified Russia-linked ransomware group REvil as the entity responsible for the cyberattack and said they are continuing to investigate. 

It is unclear how much money REvil demanded or if, in fact, JBS paid a ransom.

The incident follows last month’s ransomware attack by Russian hacking group DarkSide on Colonial Pipeline Company that prompted the fuel supplier to suspend operations for several days and triggered gas shortages in multiple states.  

Colonial Pipeline, which supplies 45% of the diesel and gasoline consumed on the East Coast, wound up paying a $4.4 million ransom to regain control of its computer systems and restart fuel delivery.

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