A notorious Russia-linked hacking group is behind the
cyberattack against JBS, a source familiar with the matter said.
Brazil's JBS controls about 20% of the slaughtering capacity
for U.S. cattle and hogs, so the plants' reopening should prevent a severe
supply-chain disruption.
JBS, the world's largest meatpacker, said most operations
resumed on Wednesday, "including all of our pork, poultry and prepared
foods facilities around the world and the majority of our beef facilities in
the U.S. and Australia."
"We anticipate operating at close to full capacity
across our global operations tomorrow," JBS USA Chief Executive Andre
Nogueira said in a statement.
The cyberattack followed one last month by a group with ties
to Russia on Colonial Pipeline, the largest fuel pipeline in the United States,
which crippled fuel delivery for several days in the U.S. Southeast.
It is the third major attack this year tied to Russia, and
White House press secretary Jen Psaki said on Wednesday the JBS hack was
expected to be discussed at President Joe Biden's mid-June summit with Russian
President Vladimir Putin.
"We're not taking any options off the table in terms of
how we may respond, but of course there's an internal policy review process to
consider that. We're in direct touch with the Russians, as well, to convey our
concerns about these reports," Psaki added.
"President Biden certainly thinks that President Putin
and the Russian government has a role to play in stopping and preventing these
attacks."
The Russia-linked cyber gang goes by the name REvil and
Sodinokibi, the source said.
Cybersecurity investigators have 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
supplier named Quanta Computer Inc earlier this year, previously posted in
Russian on cyber-crime forums, marketing stolen data.
In the Quanta Computer case, the hackers sent extortion
threats and demanded a payment of $50 million for the company to regain access
to its systems.
Over the past few years, ransomware has evolved into 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.
SCRAMBLING FOR BEEF
With North American operations headquartered in Greeley,
Colorado, JBS sells beef and pork under the Swift brand, with retailers like
Costco Wholesale Corp carrying its pork loins and tenderloins.
U.S. beef and pork prices are already rising as China
increases imports, animal feed costs rise and slaughterhouses have confronted a
labor shortage since COVID-19 outbreaks shut down many U.S. meat plants.
"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 are going to run," said Altin Kalo, economist at Steiner
Consulting Group. "There's a fair amount of people that are scrambling (for
beef supplies)."
U.S. meatpackers on Wednesday slaughtered 12.5% fewer cattle
than a week earlier and 8% less than a year earlier, although slaughtering was
up about 12% from Tuesday, according to estimates from the U.S. Department of
Agriculture.
Plants are expected to return to full capacity in the next
couple days, said officials with the United Food and Commercial Workers (UFCW)
International Union, which represents over 25,000 JBS meatpacking workers.
JBS also owns most of 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 tumbling on Tuesday as the JBS plant shutdowns prevented
farmers from delivering their cattle to slaughter plants.
The attack drew attention to the concentrated beef sector in
the United States, where four companies including JBS slaughter over 80% of fed
cattle and shutdowns of slaughtering plants have a severe impact on prices that
ranchers are paid for their cattle.
"The Justice Department needs to take a serious look
into the meatpacking industry, and if they cannot, Congress needs to pass
reforms that protect a fair and open cattle market," U.S. senators led by
Republican Mike Rounds of South Dakota and Democrat Tina Smith of Minnesota
wrote in a letter to Attorney General Merrick Garland. -Reuters