Meat Prices Expected to Climb Up to 3% Over Summer, Even Before JBS Outage

The U.S. Department of Agriculture predicted that meat prices will rise up to 3% this summer, even before the cyberattack that caused an outage at the world's largest meat processing company.

The department estimates that beef prices might rise 1% to 2%, while poultry might rise up to 1.5% and pork between 2% and 3%, the Associated Press reported. Trey Malone, a Michigan State University assistant professor of agriculture, said that the JBS attack might accelerate the already-rising meat prices caused by COVID-19 shutdowns, rough weather and a shortage of workers at meat processing plants.

The country's beef-processing capabilities would fall nearly 25% if JBS—the second-largest meat beef, pork and chicken producer in the U.S.—was shut down for just one day. The company said that the attack affected operational servers in North America and Australia and believed back-up servers and private customer, employee and supplier data weren't accessed.

Although the company hasn't publicly confirmed that the cyberattack was ransomware, the White House said that JBS had reported a ransom demand from a criminal organization believed to be in Russia.

"Our systems are coming back online and we are not sparing any resources to fight this threat," Andre Nogueira, CEO of JBS USA, said in a statement.

For more reporting from the Associated Press, see below.

JBS plants in Australia resumed limited operations as of Wednesday in New South Wales and Victoria states, Agriculture Minister David Littleproud said. The company hoped to resume work in Queensland state on Thursday, he said.

JBS is the largest meat and food processing company in Australia, with 47 facilities including abattoirs, feedlots and meat processing sites.

Littleproud said his department and Australian law enforcement officials were due to meet with their counterparts in the U.S. on Wednesday.

JBS, which is a majority shareholder of Pilgrim's Pride, didn't say which of its 84 U.S. facilities were closed Monday and Tuesday because of the attack. It said JBS USA and Pilgrim's were able to ship meat from nearly all of its facilities Tuesday. The company also said it was making progress toward resuming plant operations in the U.S. and Australia. Several of the company's pork, poultry and prepared foods plants were operational Tuesday and its Canada beef facility resumed production, it said.

Earlier Tuesday, a union official confirmed that two shifts at the company's largest U.S. beef plant, in Greeley, Colorado, were canceled. Some plant shifts in Canada were also canceled Monday and Tuesday, according to JBS Facebook posts.

Jean-Pierre said the White House "is engaging directly with the Russian government on this matter and delivering the message that responsible states do not harbor ransomware criminals." The FBI is investigating the incident, and the Cybersecurity and Infrastructure Security Agency is offering technical support to JBS.

In addition, USDA has spoken to several major meat processors in the U.S. to alert them to the situation, and the White House is assessing any potential impact on the nation's meat supply.

JBS has more than 150,000 employees worldwide.

It's not the first time a ransomware attack has targeted a food company. Last November, Milan-based Campari Group said it was the victim of a ransomware attack that caused a temporary technology outage and compromised some business and personal data.

In March, Molson Coors announced a cyber attack that affected its production and shipping. Molson Coors said it was able to get some of its breweries running after 24 hours; others took several days.

Ransomware expert Brett Callow, a threat analyst at the security firm Emsisoft, said companies like JBS make ideal targets.

"They play a critical role in the food supply chain and threat actors likely believe this increases their chances of getting a speedy payout," Callow said.

Mark Jordan, who follows the meat industry as the executive director of Leap Market Analytics, said the disruption would be minimal if JBS recovers in the next few days. Meat processers are accustomed to delays because of various factors including industrial accidents and power outages. They make up for lost production with extra shifts, he said.

"Several plants owned by a major meatpacker going offline for a couple of days is a major headache, but it is manageable assuming it doesn't extend much beyond that," he said.

U.S. meat demand generally eases for a few weeks between Memorial Day and the July 4 Independence Day holiday.

But such attacks can wreak havoc. Last month, a gang of hackers shut down operation of the Colonial Pipeline, the largest U.S. fuel pipeline, for nearly a week. The closure sparked long lines and panic buying at gas stations across the Southeast. Colonial Pipeline confirmed it paid $4.4 million to the hackers.

Jason Crabtree, the co-founder of QOMPLX, a Virginia-based artificial intelligence and machine learning company, said Marriott, FedEx and others have also been targeted by ransomware attacks. He said companies need to do a better job of rapidly detecting bad actors in their systems.

"A lot of organizations aren't able to find and fix different vulnerabilities faster than the adversaries that they're fighting," Crabtree said.

Crabtree said the government also plays a critical role, and said President Joe Biden's recent executive order on cybersecurity—which requires all federal agencies to use basic security measures, like multi-factor authentication—is a good start.