Breaking Stories

Market Extra: JBS cyberattack could contribute to rising meat prices as grilling season heats up


A cyberattack on the world’s largest meat producer could spell pain for farmers and consumers alike, while highlighting the vulnerability of the food supply chain.

Live-cattle futures tumbled but came off initial lows Tuesday, in a move partly attributed to the attack on JBS USA that news reports say has closed a number of the gigantic meatpacker’s plants. The company is owned by Brazil-based JBS SA

and is one of the big four meatpackers, and by itself accounts for around 22% to 25% of the daily U.S. cattle harvest.

In terms of the meat supply chain, the attack “probably couldn’t have come at a worse time,” said Isaac Olvera, lead food and agricultural economist at ArrowStream, a food service supply-chain technology provider.

The incident follows the Memorial Day weekend, traditionally viewed as the kickoff to the summer grilling season when demand for meat sees a seasonal increase. It is when retailers aim to restock supplies and prepare for Father’s Day and the Fourth of July.

“So the longer this goes on, the bigger hole this creates moving forward,” Olvera said, in a phone interview.

JBS USA said the resolution of the cyberattack would delay certain transactions with customers and suppliers. The company said it has suspended all affected systems, notified authorities and is working with professionals and third-party experts as a part of its remediation.

The Federal Bureau of Investigation is probing a ransomware attack on the meatpacking company, the White House said Tuesday.

Briefing reporters on Air Force One, principal deputy press secretary Karine Jean-Pierre said the company notified the Biden administration on Sunday that it was victimized. Jean-Pierre said the administration has offered assistance to the company and that JBS told the White House the ransom demand came from a criminal organization “likely based in Russia.” She said the White House is engaging with the Russian government and is “delivering the message that responsible states don’t harbor ransomware criminals.”

The attack is the latest to highlight the threat posed by hackers to supply chains. It comes after a ransomware hack last month on Colonial Pipeline that forced the shutdown of a key fuel artery to the East Coast, sparking panic buying of gasoline and fuel outages at stations across much of the southeastern U.S.

News reports said JBS had closed its five largest U.S. beef processing facilities. Bloomberg said the facilities handle 22,500 cattle a day.

Neither JBS USA nor JBS SA immediately responded to requests for comment.

Live cattle for August delivery


on the Chicago Mercantile Exchange were down 1.17 cents, or 1%, at $1.1745 a pound after trading as low as $1.146 in early activity.

“It is such a fluid situation” that it’s difficult to discern the long-term impact of the cyberattack, said Kevin Good, vice president of industry relations at CattleFax, a Colorado-based market advisory service.

If JBS is able to process cattle on Wednesday, it would help ease uncertainty but until then the market is trading in “more of a risk-off” manner, Good said, in a phone interview.

The attack comes as meat prices were already sharply higher from a year ago, part of a broader inflation phenomenon fueled by labor shortages, supply-chain bottlenecks and pent-up consumer demand, analysts said.

Retailers could face a shortage of deliverable products if a shutdown continues, Olvera said.

A prolonged shutdown could result in retail shortages, he said. That probably wouldn’t leave supermarket meat cases empty, but the selection could begin to thin.

Robert Schroeder contributed reporting

Mark Hulbert: Why stocks could tumble even as the post-pandemic U.S. economy grows

Previous article

Capitol Report: Biden unveils steps aimed at closing racial wealth gap as he marks Tulsa massacre’s 100th anniversary

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *