This week, all eyes were once again on the world of meat production in the United States.
A ransomware attack on Brazilian food giant JBS forced the closure of all that company’s beef plants in the United States, facilities that account for nearly a quarter of US supplies. There were also closures in Australia and one in Canada. In fact, the extent of the global impact is not entirely clear, as JBS has not released the details.
Late on Thursday, the company announced that all of its operations had returned to normal capacity. They did not last long, their effects quickly spreading through the meat markets. Wholesale beef and pork prices skyrocketed in the United States, and livestock futures swung sharply.
More than anything else, the episode revealed how vulnerable food supplies are to the threat of cyberattacks.
And it’s not just limited to meat. Almost every point in the food supply chain is now interconnected with digital processes, and automation has also increased transversely. Almost everything in the industry, from the computer systems that monitor worker absenteeism in mass production factories to the software systems that have been integrated into tractors traversing the cornfields of the Midwest, has been digitized.
Furthermore, much of food production is now extremely concentrated in the hands of a few major players. That is especially the case in the United States, but it is also happening more and more in other parts of the world. JBS, for example, went from starting in 1953 as an individual slaughterhouse in Brazil to becoming a powerhouse that is now the world’s largest meat producer through a series of huge corporate acquisitions.
The fervor of trading around the world for commodities has created single points of failure in critical industries, making them prime targets for hackers who want to threaten huge disruptions to collect the highest possible payouts.
Global food prices extended their rebound to the highest level in nearly a decade, raising fears of having to pay large amounts of grocery bills as economies struggle to emerge from the COVID-19 crisis.
A United Nations gauge of global food costs rose in May for the 12th consecutive month, the longest in a decade. The risk is that the sustained advance will cause more widespread inflation to accelerate, complicating the efforts of central banks to provide more stimulus.
