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Ransomware attacks giant meat JBS and leaks to farmers and restaurants

Employees of the U.S. Division

JBS SA,

JBSAY -0.68%

The world’s largest meat company noticed an anomaly in its computer system on Memorial Day weekend, an informal kick-off of the busy summer grill season.

The criminal is Ransomware attack, It’s not just about achieving your goals. Disrupted the American food industryFrom pig farms in Iowa to processing plants in small towns and restaurants in New York. Hacking caused domino effects, boosted wholesale meat prices, helped barn animals, and forced food distributors to rush to find new suppliers.

The attack was up to date Clash between cyber criminals and businesses Essential to the functioning of the US economy. This was another turmoil for the US food industry after the factory was closed for weeks by the Covid-19 pandemic last year. This year, the economic recovery has increased its ability to meet supplier demand.

After identifying the intrusion early on Sunday, May 30, JBS warned US authorities that it had set three goals. Reboot the system with the backup data. Then tap the expert to handle the negotiations with the attacker. By that afternoon, JBS USA Holdings CEO Andre Nogueira had concluded that the company had no problems with encrypted backups of its data.

Greeley, Colorado, a beef production facility at JBS, the world’s largest meat company in terms of sales.


Photo:

Michael Siagro / Bloomberg News

On Memorial Day, May 31, JBS employees, FBI personnel, and cybersecurity experts at JBS’s US headquarters in Greeley, Colorado, worked to bring the system back online. They prioritized JBS’s shipping platform and allowed the company to resume the transfer of meat to its customers.

Farmer

Shortly before 9 pm on Monday, Dwight Mogler took a walk in a graveyard near a family farm in Lyon County, Iowa. He ignored the phone when he was talking to his 16-year-old son about the sacrifice of a veteran buried there. A follow-up text message from the logistics manager caught his attention.

“Hey, Dwight, there was a cyberattack on JBS. I’m not sure what’s going on, but for now I have to put your luggage on hold,” Mogler said. He said he was a little wondering if the industry was being attacked by Russia and China.

Mogler ran into a new problem when he answered the phone Tuesday morning looking for another pig buyer to hand over to the JBS factory in Worthington, Minnesota that day. , Push down the price. He found competing plants in Iowa and Nebraska and robbed his pigs, but Mogler estimated that lower market prices reduced sales for the week by about $ 17,000.

“We already have a lot of volatility. This just expanded it in the market,” Mogler said, as planned later in the week at JBS’s Worthington plant with other pigs. Said Mr. Mogler, who delivered the.

Senator

Nogueira answered a phone call with Senator Chuck Grassley (Republican, Iowa) on Tuesday. Mr. Grasley, who is also a farmer, Highly integrated meat packaging industry Among the few large companies.

Grasley was meeting with livestock producers concerned that cyberattacks could hurt their business, he said in an interview. Senator wanted to know how long JBS would be out of service and if he could help. They discussed how cryptocurrencies such as Bitcoin made it easier for cybercriminals to launch ransomware attacks and hide their traces.

Grassley and Nogueira understood the impact of an unexpected slaughterhouse outage. A Covid-19 infection among factory workers in the spring of 2020 forced major slaughterhouses to close for several weeks at a time. Back up livestock on the farm And he leads a farmer who euthanizes tens of thousands of pigs.

Restaurant

With the restaurant reopening, food distributors already struggling to get enough meat competed to replace their beef, pork and chicken orders through JBS. Some people who usually procure meat from other suppliers bought more than planned in preparation for long-term rises in wholesale prices.

As JBS processing operations went almost offline on Tuesday, the number of cattle and pork slaughtered in the United States decreased, meat supplies tightened, and wholesale beef and pork prices rose. According to one distributor, the price of bone-in pork shoulders used to make pulled pork-like barbecue staples rose 25% last week to a record $ 2.48 per pound.

Employee of JBS production facility in Greeley, Colorado, June 1st.


Photo:

Michael Siagro / Bloomberg News

At Billy Joe’s Liveworks, a barbecue joint overlooking the Hudson River in New York, the price of pork shoulders rose 40 cents per pound last week, owner Joe Bonula said.

Bonula said he survived a ransomware attack at his hotel earlier this year. Increasing costs he pays for many goods and services Because the economy will resume. “It’s a trivial matter and we have to eat it. We can’t keep raising prices,” he said.

payment

With the progress of using backup data to bring JBS systems online on Tuesday night, Nogueira is confident enough to issue a statement announcing that most of the JBS plants will be operational on Wednesday, June 2. Had

The company’s consultants continued to negotiate with hackers. According to Nogueira, a forensic analysis by JBS and its experts showed that customer, supplier, and employee data were not compromised, but cybercriminals claimed to have captured some. ..

JBS cybersecurity experts warned that an attacker may have attempted to break in in some way.

According to Nogueira, JBS sent the payments in one bitcoin. He then admitted that the attacker had not captured the JBS data, he said. Nogueira did not disclose the date on which JBS made the payment. According to him, the cost of the attack is not important to JBS, which generated $ 53 billion in worldwide sales in 2020.

Tom Robinson, chief scientist at Elliptic, a UK-based blockchain analytics and compliance company, said on Tuesday, June 1st, after 7 pm EST, 301 Bitcoin worth about $ 11 million at the time. Said that was paid. Due to factors such as trading dates and exchanges, he believed it was a JBS payment.

On Thursday, June 3rd, JBS announced that all factories were in full operation. According to Nogueira, JBS had lost a day’s production by the weekend and the rate of meeting customer orders was just 3% below normal levels, less than the effects of a severe storm. Mr. said.

After the attack, Nogueira said he received supportive messages from other companies that dealt with similar intrusions. “Criminals will continue to become more sophisticated,” he said. “We need to keep our investment.”

Livestock slaughter recovered later in the week when the JBS plant returned online, USDA data showed. USDA announced this week that it will invest more than $ 4 billion to strengthen and diversify its food system, including investments in small and medium-sized meat processing facilities. Secretary of Agriculture Tom Vilsack said it is important to protect markets and consumers from the turmoil of more frequent cyberattacks.

“Sure, JBS learned a few things from this,” Vilsack said. “Hopefully, I hope this is a warning to you.”

Write to Jacob Bunge jacob.bunge@wsj.com And Jesse Newman jesse.newman@wsj.com

Cyber ​​attacks and business

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Ransomware attacks giant meat JBS and leaks to farmers and restaurants

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