JBS, with North American operations headquartered in Greeley, Colorado, controls about 20 percent of the slaughtering capacity for US cattle and hogs. Photo: 2020 Getty Images
Brazil's JBS SA has told the US government that a ransomware attack on the company that has disrupted meat production in North America and Australia originated from a criminal organisation likely based in Russia, the White House said on Tuesday.
JBS is the world's largest meatpacker and the cyberattack caused its Australian operations to shut down on Monday and has stopped livestock slaughter at its plants in several US states.
The attack follows one last month by a group with ties to Russia on Colonial Pipeline, the largest fuel pipeline in the United States, that crippled fuel delivery for several days in the US southeast.
White House spokeswoman Karine Jean-Pierre said the United States has contacted Russia's government about the matter and that the FBI is investigating.
"The White House has offered assistance to JBS and our team at the Department of Agriculture have spoken to their leadership several times in the last day," Jean-Pierre said.
"JBS notified the administration that the ransom demand came from a criminal organisation likely based in Russia. The White House is engaging directly with the Russian government on this matter and delivering the message that responsible states do not harbour ransomware criminals," Jean-Pierre added.
JBS sells beef and pork under the Swift brand, with retailers like Costco Wholesale carrying its pork loins and tenderloins. JBS also owns most of chicken processor Pilgrim's Pride, which sells organic chicken under the Just Bare brand.
If the outages continue, US consumers could see higher meat prices during summer grilling season and meat exports could be disrupted at a time of strong demand from China.
The disruption has already had an impact, industry analysts said. US meatpackers slaughtered 94,000 cattle on Tuesday, down 22 percent from a week earlier and 18 percent from a year earlier, according to estimates from the US Department of Agriculture.
Pork processors slaughtered 390,000 hogs, down 20 percent from a week ago and 7 percent from a year ago.
Prices for choice cuts of US beef shipped to wholesale buyers in large boxes jumped $US3.59 to $334.56 per hundred pounds, the USDA said. Prices for select cuts climbed $5.55 to $306.45 per hundred pounds.
The USDA, Department of Homeland Security and other agencies are closely monitoring the meat and poultry supply, a White House official said. The agencies are also working with agricultural processors to ensure products move efficiently and that no price manipulation occurs as a result of the cyberattack, the official said.
The cyberattack caused JBS's Australian operations, including this plant in Brisbane, to shut down on Monday. Photo: AFP
Affected systems suspended
JBS said it suspended all affected systems and notified authorities. It said its backup servers were not affected. A company representative in Sao Paulo said there was no impact on Brazilian operations.
The company said Sunday's cyberattack affected its North American and Australian IT systems and "resolution of the incident will take time, which may delay certain transactions with customers and suppliers".
JBS, with North American operations headquartered in Greeley, Colorado, controls about 20 percent of the slaughtering capacity for US cattle and hogs, according to industry estimates.
"The supply chains, logistics, and transportation that keep our society moving are especially vulnerable to ransomware, where attacks on choke points can have outsized effects and encourage hasty payments," said threat researcher John Hultquist with security company FireEye.
US beef and pork prices are already rising as China increases imports, animal feed costs rise and slaughterhouses face a dearth of workers. Any further impact on consumers will depend on how long production is down, market analysts said.
"If it goes on a week or longer, you've got a major problem," said Dennis Smith, broker for Archer Financial Services in Chicago.
The US Cattlemen's Association, a beef industry group, said on Twitter that it had reports of JBS redirecting livestock haulers who arrived at plants with animals ready for slaughter.
Last year, cattle and hogs backed up on US farms and some animals were euthanised when meat plants were shut during coronavirus outbreaks among workers.
A JBS beef plant in Grand Island, Nebraska, said only workers in maintenance and shipping were scheduled to work on Tuesday.
Over the past few years, ransomware has evolved from one of many cybersecurity threats to a pressing national security issue.
A number of gangs, many of them Russian-speakers, develop the software that encrypts files and then demand payment in cryptocurrency for keys that allow the owners to decipher and use them again.
- Reuters