JBS SA shut its North American and Australian computer networks after an organized cyber assault on 30 May on some of its servers, JBS reported via email. Without commenting on operations at its numerous plants, JBS said the incident may delay certain transactions with customers and suppliers. JBS SA is a Brazilian company that is the largest meat processing company in the world, producing factory processed beef, chicken and pork, and also sells by-products from the processing of these meats. It is headquartered in São Paulo, Brazil. Current suspects include Russia - again. The average unit price for US fresh beef in April rose by five per cent from March and was up about 10 per cent from a year earlier. Pork and chicken prices are each up about 5.4 per cent from last year. This JBS hack will only make prices spike even higher in all the countries affected. US inventories of frozen beef at the end of April were five per cent lower than a year earlier, while frozen pork supplies were down 26%, according to the US Department of Agriculture.
The current JSB attack shut down two shifts and halted processing at one of Canada’s largest meatpacking plants, while the company canceled all beef and lamb harvests across Australia. Some slaughter and fabrication shifts have also been canceled in the US.
Hackers now have the commodities industry and its supply chain on their radar screen with the JBS cyber-attack coming just three weeks after the operator of the biggest US gasoline pipeline was targeted. It is also happened as the global meat industry battles lingering pandemic absenteeism after trying to recover from mass virus outbreaks in 2020 year that caused plants to shut down and supplies disrupted.
In Canada, the JBS cyber assault affected a beef plant in Brooks, Alberta, about 190 kilometers (118 miles) east of Calgary, on 31 May 2021, according to a spokesman for United Food and Commercial Workers Canada Union Local 401. This facility accounts for more than a quarter of Canada’s capacity which encompasses approximately 4,200 head of cattle a day. A JBS packaging facility in Belleville, Ontario, where beef, pork and salmon are prepared for grocery stores, was operating normally, said a spokesman for UFCW Canada Local 175. In the US, the UFCW Local 7 posted on social media that slaughter and fabrication shifts A and B had been canceled for 1 June 2021. Local 7 membership includes 3,000 workers at JBS in Greeley, Colorado.
Sao Paulo-based JBS owns facilities in 20 countries. Australia and New Zealand account for 4% of the company’s revenue, while the US represents 50% and Canada 3%, according to company fillings. The company also has operations in South America and Europe.
The good news is that JBS’s backup servers were not affected, and the company is actively working to restore their systems. The processor said it is not aware of any customer, supplier or employee data being compromised or misused, of so they say as of this reporting.
The Australian Cyber Security Centre is providing technical assistance to JBS, the country’s Agriculture Minister has said its government is working with numerous international partners trying to trace, rectify and prosecute where possible, those who conducted the attack. JBS is the largest Australian meat and food processor that provide beef, lamb, pork, and value-added branded products. It exports to more than 50 countries and its Dinmore facility is the biggest beef plant in the southern hemisphere. On the domestic market, the Australian Meat Industry Council said there is no indication that the attack will have a major impact on red meat and pork products supply. Yet the shutdown is a big concern for exports if it continues, said a food market expert. Australia ships overseas about 70% - 75% of red meat products from sheep and cattle. So even a short period of a food supply chain disruption poses a risk to worldwide supplies too. “If it’s a short term scenario, just a week or something that they’re offline, then it’s probably just a minimal hiccup,” said the analyst. But “given the size of JBS globally, if they were offline for any more than a week, then we’re going to see disruption to supply chains for sure,” he said.
Part of the supply chain involves the shipment of food products. Trucks move most of a nation’s food products. A trucking expert close to Red Sky Alliance explains, “there are several impacts that can be "felt" from the recent JBS cyber-attack. The first is obviously the end user's table price for beef but that is only just the ‘end-of-the-road feel.’ The true impacts have already occurred at the point of this JBS ransomware attack, which halted the supply chain. The back-tracking of the hitchhiker's view has us looking at every stop along this ‘road’ or food supply chain. The local store's price is impacted by ‘over-the-counter; under-the-shirt’ theft (through the cyber-attack) that has become so widespread and compounds the already higher prices where the local store and consumer is the true intended ‘target.’ The food distributor's price, impacted by the ‘left-on-the-dock-box’ scheme where the supply chain workers are the unwitting culprits. This includes the food processors who cannot produce the food items, to the dockworkers at distribution sites, then the truck drivers to the end victim grocery stores and consumers. This becomes a place of contention for one of the most impacted individuals along the supply chain way; the truck drivers. The real supply chain heroes are those truckers who take pride in their task and do so by protecting their load and keeping in touch with their dispatcher who unfortunately are also another weak link in the food supply chain but who try hard despite it all. Teamsters kept the supply chains going through the CV-19 pandemic and did so with distinction.
“Diverting food loads is not unheard of and is less likely the source of higher-prices-by-theft than the inadvertent re-assignment of the driver to a higher-paying-load of another shipper and even a different commodity altogether. The impact on the "trucking" portion alone is true and real ripple effect impact.”
The bottom line it that food prices will rise, even more than the close to 50% increase since CV-19. The temporary halt to meat products will only serve to compound the international food market. Higher food prices was the true intended consequence of this ransomware attack.
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