By Jacob Bunge
JBS SA said it was hit by a cyberattack, disrupting operations for the world's biggest meatpacker on multiple continents.
Brazil-based JBS said the attack had affected systems in Australia and in the U.S., where the company is the largest beef processor and a top pork supplier. JBS said that after identifying the incursion on Sunday, it suspended affected systems and was working to get operations back online. JBS halted some meat-processing operations at major U.S. plants on Tuesday, according to union officials and notices shared with employees.
Some of the biggest U.S. meat-processing plants halted processing operations after the attack, according to worker representatives and notices shared with JBS employees, including facilities in Colorado, Iowa, Minnesota, Pennsylvania and Texas. Representatives for JBS had no immediate comment on plant operations.
The attack on JBS, which sold $52.4 billion worth of meat and other products globally in 2020, is the latest cyberattack to demonstrate the rising and potentially costly risk to corporate operations posed by such incursions.
Such attacks can affect daily life in the U.S. A cyberattack on Colonial Pipeline Co. last month shut down the fuel supplier's main fuel conduit for the U.S. East Coast, prompting a run on regional gas stations and pushing gasoline prices to their highest levels in 6 1/2 years. Since the Colonial attack, lawmakers have warned that criminal ransomware gangs are increasingly targeting U.S. infrastructure and businesses, snarling day-to-day operations.
For JBS, which processes nearly a quarter of U.S. beef and about one-fifth of pork, the attack illustrates a new threat for an industry that was among the hardest hit by Covid-19. As the pandemic arrived in the U.S., tens of thousands of plant workers were infected, according to labor union estimates, forcing a wave of shutdowns over the spring of 2020 that backed up livestock on farms. Meatpackers spent hundreds of millions of dollars to temporarily boost wages, install automated temperature scanners and place partitions between processing-line stations.
JBS said that the cyberattack didn't affect its backup servers, and that the company was working with technology specialists to restore its systems. As of Monday, JBS said that there was no sign that customer, supplier or employee data was compromised. It said the attack could delay business with meat buyers, cattle feedlots and other suppliers.
At a JBS beef plant in Souderton, Pa., which the company estimates is the largest beef plant east of Chicago, workers were told no slaughtering or processing would take place Tuesday, according to Wendell Young, president of the local United Food and Commercial Workers International union, which represents JBS plant employees.
"The goal is to reopen tomorrow, but until they notify us later today, we don't know about that," Mr. Young said.
In Greeley, Colo., where JBS runs another major beef-packing plant, shifts were canceled due to the cyberattack, a spokeswoman for the local UFCW chapter said. The company's Cactus, Texas, beef plant also canceled Tuesday operations with the exception of maintenance and some other functions, according to a notice posted to the plant's Facebook page.
JBS' pork plant in Ottumwa, Iowa, told employees that Tuesday's slaughtering and bacon-slicing shifts were suspended, according to a separate Facebook notice. In Worthington, Minn., where JBS runs another pork plant, cutting, trimming and deboning shifts were suspended Tuesday, according to a notice posted to that plant's Facebook page.
Meat-market analysts said the plant closures could soon lead to higher consumer prices, which have climbed for many cuts this year due to high demand and a tight labor market. "Even one day of disruption will significantly impact the beef market and wholesale beef prices," wrote analysts for Steiner Consulting Group, which researches the meat industry.
JBS shares traded in Brazil were 1.5% higher in midday trading. Shares of Pilgrim's Pride Corp. the U.S. chicken processor majority-owned by JBS, fell 0.5%. Live cattle futures trading on the Chicago Mercantile Exchange fell on Tuesday, with the most-active cattle contract down 1.8% midday at just above $1.16 a pound. The primary factor weighing on the contract was the hack, livestock traders said, by raising the risk that some plants would be unable to purchase livestock.
JBS said the attack targeted some of its information technology and that the company has since suspended the use of affected servers. While attacks on IT systems can wreak havoc, cybersecurity experts have said hackers can cause even greater damage if they reach operational technology used to keep factories or other industrial facilities running.
A JBS spokeswoman didn't immediately respond to a request for comment on whether the attack affected the company's operational-technology systems or whether hackers demanded a ransom.
David Uberti and Dave Sebastian contributed to this article.
Write to Jacob Bunge at firstname.lastname@example.org
(END) Dow Jones Newswires