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White House slams Russia over ransomware attack on JBS

President Biden will meet President Vladimir Putin as planned on June 16 “as a vital part of defending America’s interests,” said a White House spokeswoman on Tuesday, after holding Russia culpable for the ransomware attack that crippled meatpacker JBS. “The White House is engaging directly with the Russian government on this matter and delivering the message that responsible states do not harbor ransomware criminals.”

JBS, the world’s largest meat processor, was hit by the attack in North America and Australia, but it said “the vast majority of our beef, pork, poultry, and prepared foods plants will be operational” on Wednesday, given the progress of its cyber-security teams. “Our systems are coming back online, and we are not sparing any resources to fight this threat,” said Andre Nogueira, chief executive of JBS USA.

The ransomware attack, which began on Sunday, forced JBS, based in Brazil, to close or slow operations in the United States, Canada, and Australia. On Tuesday night, JBS announced “significant progress in resolving the cyber attack.” Operations in Mexico and Britain were not affected, according to the statement. Several of its pork, poultry, and prepared food plants were operational and a beef slaughter plant in Canada reopened on Tuesday.

In conversations with administration officials, JBS said the ransom demand came from a criminal organization likely based in Russia, said White House deputy press secretary Karine Jean-Pierre.

If so, it would be the second attack by criminal hackers operating in Russia to affect the United States in the past four weeks. The cyber gang DarkSide was blamed for infiltrating the computer network of Colonial Pipeline and disrupting gasoline, diesel, and jet fuel supplies on the East Coast from May 6-12.

There was no immediate estimate of the possible impact on beef supplies – and prices – in grocery stores or the near-term effect on cattle prices, although analysts agreed the impact would grow with each additional day of the cyber attack. “We think this is a major issue, but much will depend on how long the disruption lasts,” said Steiner Consulting Group in a daily livestock newsletter.

JBS accounts for nearly a quarter of beef production in the United States. All of its U.S. beef plants were closed on Tuesday, a labor official told Bloomberg. Cattle futures prices fell by $2 per 100 pounds during trading in Chicago, to close at $116 on Tuesday. JBS also is a major pork processor, with 18% of U.S. production. Cattle slaughter was noticeably lower on Tuesday than a week earlier but pork plants also reported lower slaughter numbers as the nation returned to work from the Memorial Day holiday.

The United Food and Commercial Workers union called on JBS to ensure its employees “receive their contractually guaranteed pay as these shutdowns continue.”

“We’re assessing any impacts on (food) supply, and the president has directed the administration to determine what we can do to mitigate any impacts as may be necessary,” said Jean-Pierre. “We call on organizations across the government and the private sector to take the threat of ransomware seriously and modernize their cyber defenses.”

The FBI is investigating the attack on JBS, Jean-Pierre told reporters accompanying Biden on a trip to Tulsa.

Late on Tuesday, the USDA said it has encouraged meat processors “to accommodate additional capacity where possible and to stress the importance of keeping supply moving.” It also contacted food, agriculture, and retail groups to underscore the importance of “working together to ensure a stable, plentiful food supply.”

The Biden-Putin meeting in Geneva will go ahead, said Jean-Pierre, “because of our countries’ differences, not in spite of them. There’s a lot we have to work through. President Biden is the most effective communicator of American values and priorities, and hearing directly from President Putin is the most effective way to understand what Russia plans and intends.”

When it disclosed the attack, JBS said criminal hackers targeted computer servers supporting its North American and Australian IT systems. “The company took immediate action, suspending all affected systems, notifying authorities and activating the company’s global network of IT professionals and third-party experts to resolve the situation.” JBS said it was working with an “Incident Response firm to restore its systems as soon as possible.”

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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