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JBS meat plants reopen as White House blames Russia-linked group for hack

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JBS meat plants reopen as White House blames Russia-linked group for hack

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WASHINGTON / CHICAGO – JBS SA employees began returning to US meat plants on Wednesday, a day after the company’s meat operations were halted following a ransomware attack, which disrupted production of meat in North America and Australia.

A notorious Russian-linked hacking group is behind the cyber attack on JBS, a source familiar with the matter said.

Brazil’s JBS controls about 20% of the US beef and pork slaughter capacity, so reopening the plants should avoid a serious supply chain disruption.

JBS, the world’s largest meatpacker, said most operations resumed on Wednesday, “including all of our pork, poultry and prepared food facilities around the world and most of our meat facilities from res in the United States and Australia. “

“We anticipate operating near full capacity in 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 at Colonial Pipeline, the largest fuel pipeline in the United States, which paralyzed fuel supplies for several days in the southeastern United States.

It is the third major attack this year linked to Russia, and White House press secretary Jen Psaki said Wednesday that the JBS hack was expected to be discussed at President Joe Biden’s summit in mid-June with Russian President Vladimir Putin.

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“We don’t rule out any options in terms of how we can respond, but of course there is an internal policy review process to consider that. We are also in direct contact with the Russians to convey our concerns about these reports, ”added Psaki.

“President Biden certainly thinks that President Putin and the Russian government have a role to play in stopping and preventing these attacks.”

The Russian-linked cyber gang goes by the names REvil and Sodinokibi, the source said.

Cybersecurity researchers 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 targeting an Apple Inc vendor called Quanta Computer Inc earlier this year, previously posted in Russian on cybercrime forums, touting 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 their systems.

In recent years, ransomware has become an urgent national security problem. Various gangs, many of them Russian-speaking, develop the software that encrypts files and then demands payment in cryptocurrencies for keys that allow owners to decrypt them and use them again.

MEAT SCRAMBLED

With its North American operations based in Greeley, Colorado, JBS sells beef and pork under the Swift brand, with retailers like Costco Wholesale Corp selling its pork tenderloins and tenderloins.

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U.S. beef and pork prices are already rising as China increases imports, animal feed costs rise, and slaughterhouses have faced a labor shortage since the outbreaks. COVID-19 closed many U.S. meat plants.

“It’s probably going to be pretty tight over the next few days because even though they (JBS) are going to start opening … who knows how they’re going to work,” said Altin Kalo, an economist at Steiner Consulting Group. “There are a lot of people who are fighting (for meat supplies).”

U.S. meat packers slaughtered 12.5% ​​fewer cattle on Wednesday than a week earlier and 8% less than a year earlier, though slaughter was up 12% from Tuesday, Department estimates of Agriculture of the United States.

The plants are expected to return to full capacity in the coming days, said officials from the International Union of Food and Commercial Workers (UFCW), which represents more than 25,000 JBS meatpacking workers.

JBS also owns the majority of the Pilgrim’s Pride Co chicken processor, which sells organic chicken under the Just Bare brand.

The company’s operations in Brazil, Mexico and the United Kingdom were not affected by the attack, JBS said.

Cattle futures on the Chicago Mercantile Exchange (CME) rose on Wednesday after falling Tuesday when JBS plant closures prevented farmers from turning their cattle over to slaughter plants.

The attack drew attention to the concentrated meat sector in the United States, where four companies, including JBS, slaughter more than 80% of the livestock fed and the closure of slaughter plants has a severe impact on the prices paid by farmers. ranchers for their livestock.

“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 cattle market,” said US Senators led by Republican Mike Rounds of South Dakota. and Minnesota Democrat Tina Smith wrote in a letter to Attorney General Merrick Garland.

(Reported by Tom Polansek and Julie Ingwersen in Chicago and Nandita Bose in Washington; edited by Nick Zieminski and Peter Cooney)

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