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Employees of JBS SA (JBSS3.SA) began returning to U.S. meat factories on Wednesday, a day after the company’s beef operations shut down following a ransomware attack, disrupting production of meat in North America and Australia.
A notorious Russian-linked hacking group is behind the cyberattack on JBS, a source familiar with the matter said.
Brazil’s JBS controls about 20% of the slaughter capacity of US cattle and hogs, so reopening the factories is expected to prevent a serious supply chain disruption.
JBS, the world’s largest meat packer, said most operations resumed Wednesday, “including all of our pork, poultry and prepared foods facilities around the world and the majority of our beef facilities in the world. United States and Australia “.
“We plan to operate at full capacity in our global operations tomorrow,” JBS USA Managing Director Andre Nogueira said in a statement.
The cyberattack was followed last month by a Russian-linked group on Colonial Pipeline, the largest oil pipeline in the United States, which crippled fuel delivery for several days in the southeastern United States. Read more
This is the third major attack this year linked to Russia, and White House press secretary Jen Psaki said on Wednesday that the JBS hack should be discussed at President Joe Biden’s summit at the mid-June with Russian President Vladimir Putin.
“We are not taking any options off the table as to how we can react, but of course there is an internal policy review process to take that into account. We are also in direct contact with the Russians to let them know. of our concerns about these reports, ”Psaki added.
“President Biden certainly believes that President Putin and the Russian government have a role to play in stopping and preventing these attacks.” Read more
The Russian-linked cybergang is called REvil and Sodinokibi, the source said.
Cyber security investigators said they believe some members of the REvil ransomware team are based in Russia. The prolific ransomware group, which is perhaps best known for attacking an Apple Inc (AAPL.O) vendor named Quanta Computer Inc (2382.TW) earlier this year, previously posted in Russian on cybercrime forums , marketing stolen data.
In the Quanta Computer case, hackers sent extortion threats and demanded a payment of $ 50 million for the company to regain access to its systems.
General view of the JBS USA Worthington hog plant in Minnesota, USA, October 28, 2020. REUTERS / Bing Guan
In recent years, ransomware has become an urgent national security issue. A number of gangs, many of whom are Russian speakers, develop software that encrypts files and then demand payment in cryptocurrency for keys that allow owners to decrypt and reuse them.
BEEF FOG
With North American operations based in Greeley, Colorado, JBS sells beef and pork under the Swift brand, with retailers like Costco Wholesale Corp (COST.O) carrying its pork loins and tenderloins.
Beef and pork prices in the United States are already rising as China increases imports, animal feed costs rise, and slaughterhouses have faced a labor shortage since the COVID-outbreaks. 19 closed many meat factories in the United States.
“It’s probably going to be pretty tight for the next few days because even though they (JBS) are going to start opening… who knows how they’re going to operate,” said Altin Kalo, economist at Steiner Consulting Group. “There are quite a few people jostling each other (for the beef supply).”
U.S. meat packers slaughtered 12.5 percent fewer cattle than a week earlier and 8 percent fewer than a year earlier on Wednesday, although slaughter was up about 12 percent from Tuesday, according to estimates by the US Department of Agriculture.
The factories are expected to return to full capacity in the coming days, said officials from the United Food and Commercial Workers Union (UFCW), which represents more than 25,000 JBS meat packing workers.
JBS also owns most of the chicken processor Pilgrim’s Pride Co, which sells organic chicken under the Just Bare brand.
The company’s operations in Brazil, Mexico and the UK were not affected by the attack, JBS said.
Chicago Mercantile Exchange (CME) cattle futures rose on Wednesday after falling on Tuesday as JBS plant closures prevented farmers from delivering their cattle to slaughterhouses.
The attack has drawn attention to the concentrated beef sector in the United States, where four companies, including JBS, slaughter more than 80% of fed cattle and slaughter plant closures are having a severe impact on prices that ranchers are paid for their cattle.
“The Department of Justice must take a serious look at the meat packaging industry, and if it cannot, Congress must pass reforms that protect a fair and open livestock market,” said the Minister of Justice. US Senator led by Republican Mike Rounds of South Dakota and Democrat Tina Smith of Minnesota wrote in a letter to Attorney General Merrick Garland.
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