JBS Cyberattack Shines A Spotlight On The Biggest Risk To Big Meat: Consolidation

Food & Drink

Cyberattacks like the one that brought meat production at JBS, the world’s largest meat packer, to a halt this week will continue to threaten the U.S. food system until consolidation and unchecked market power within the agribusiness industry are addressed. 

A day after the initial ransomware attack, thought to have been perpetrated by a Russian hacking group, JBS plants in the U.S. are opening back up again as the FBI investigates the incident. The attack which targeted JBS operations in the U.S., Canada and Australia, forced 13 of its U.S. plants to close. 

The hackers targeted U.S. meat production right at the beginning of grilling season, and while alternative meats have had billions in funding pouring in and more consumers picking up products at the grocery store, meatless foods are still a tiny fraction of what America consumes overall. The U.S. meat industry is worth more than $1 trillion annually and Americans still eat more meat than almost any other country—220 pounds per person annually, more than most European countries—and consumption continues to grow, despite the environmental harm that factory farming causes widely. 

But it begs the question: why is America’s meat supply so at risk of price fluctuations and shortages in the first place? The answer is simple: the industry is too consolidated. More than 80% of the beef industry is controlled by just four companies—JBS, Tyson, Cargill and National (owned by Brazil’s Marfrig)—and two of them are foreign businesses. Brazil-based JBS is responsible for a quarter of the U.S. beef market through its JBS USA subsidiary. The company is the country’s largest beef producer and its No. 2 producer of pork and chicken. That hyper-concentration makes any shocks to the system feel seismic. 

That kind of concentrated control, flagged by critics as a national security threat for years, is currently being investigated in Congress. JBS acquired iconic American meat-packing assets in the past decade, largely from corrupt funds and a bribery scheme in Brazil, and has been weighing a U.S. IPO. It’s unclear whether JBS paid a ransom, as was the case with the attack on the Colonial Pipeline last month, which led to gas shortages in several states. Colonial Pipeline paid the Russian hacking group DarkSide, which claimed responsibility for the hack, a reported $5 million.  

“This is the most recent incident in a disturbing trend of cyberattacks that show just how fragile and vulnerable our supply chains and critical infrastructure are,” says Amit Yoran, the CEO of cybersecurity startup Tenable and a founding director of the cyber security infrastructure agency under the Department of Homeland Security.

“The Colonial Pipeline attack shut down systems that supply 45% of the Eastern United States’ fuel, and the JBS hack has resulted in the shutdown of some of the largest meat processing plants in the world. These attacks have very tangible impacts that affect large swaths of the population.”

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