Meat prices continued to rise as North American and Australian beef and lamb processing plants operated by JBS, the world's largest meat packing company, began to recover from the aftermath of a cyberattack believed to be linked to Russia.
Specialist website Beef Central reported that the U.S. plants are likely to get back to work from Thursday, while its Australian plants will reopen on Friday or at the beginning of next week. It reported that some JBS Australia plants completed boning shifts on Wednesday, but it was only to clear carcasses held in cold storage from kills performed last Friday, before the cyberattack occurred.
Beef Central also reported that the price for a U.S. boxed beef cutout went up by $3/cwt (a standard unit of weight) for Choice, and 5.55 cents for Select grade on June 1 compared with May 28.
This rise was down to other U.S. packers pushing up their prices, due to the reduced supply in the absence of JBS, columnist Steve Kay said.
"The key factor now is how quickly JBS can get its operations in North America and Australia up and running again. If it's a matter of only two or three days, it will not produce much market impact. But if it drifts into next week, it is going to be more significant," Kay said.
"The lesson out of this episode for the worldwide meat industry is that they have suddenly realized—if they had not done so before—that they are vulnerable to cyber attack. They are going to have to redouble their efforts and spend a whole lot more to get the best cyber-protection mechanisms money can afford," he added.
The JBS breach, which was first discovered on Sunday, impacted at least 10,000 jobs across meat factories in Australia, Canada and the U.S. The South American JBS businesses, including its Sao Paulo, Brazil, headquarters, were not compromised by the cyberattack.
JBS employs more than 66,000 people at 84 U.S. sites and around 11,000 in Australia. The meat packer stood down up to 7,000 workers in Australian abattoirs, while shifts for at least 3,000 workers have been canceled across Canada and the United States, the Financial Times reported.
The recent breach is the latest in a line of cyberattacks on large companies, NGOs and government agencies that, the U.S. has suspected, come from Russia.
In May, a ransomware stopped flows on the Colonial pipeline, the largest pipeline system for refined oil products in the U.S. Colonial said it had paid the hackers $4.4 million on May 7, although it denied doing so at the time.
The White House said Tuesday that it was engaging with the Russian government on the latest breach and that the FBI was investigating the cyberattack.
The U.S. Department of Agriculture had predicted that meat prices would rise up to 3 percent this summer, even before the JBS cyberattack.
That cyberattack is a smaller part of the big picture as to why beef prices are going up, according to the latest U.S. Daily Livestock Report issued by the Steiner Consulting Group, which specializes in commodity prices. The consulting firm said the price increases are mainly due to U.S. meat processing capacity not being able to keep up with demand.
The report anticipated that the JBS hack would impact the U.S. spot market pricing for much of this week.
"The most recent attack will only exacerbate what was already a very difficult market, one that reflects the resurgence in demand post COVID lockdowns; the bullwhip effect from as food service supply chain recovers; the tight labour situation along the supply chain; and various logistics bottlenecks," it said.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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Jack Dutton is a Newsweek Reporter based in Cape Town, South Africa. His focus is reporting on global politics and ... Read more
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