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Cyberattacks Continue on America’s Critical Infrastructure and Supply Chains

At the end of 2020, Forbes reported on a growing crisis in America—a shortage of cybersecurity professionals with the advanced skills to help businesses protect themselves and their customer’s data from growing cyber threats.

Then, in 2021, the largest cyberattack on an oil infrastructure target in America’s history, the Colonial Pipeline, led to panicked gas buying, fuel shortages, and rising prices. Washington, D.C. reported that over 85% of their gas stations ran out of fuel before the company ended a six-day shutdown. Colonial Pipeline, which controls 45% of fuel in the Eastern U.S., paid the hackers, the DarkSide, 75 bitcoin, or $4.4 million just a few hours after the attack took place. U.S. law enforcement has since recovered $2.3 million in bitcoin.

This event was followed by the ransomware attack on the world’s largest beef and pork processing company, JBS. The Brazilian meat company’s annual revenue comes in at about $50 billion, and the company slaughters an astonishing 13 million animals every day. The company produces factory-processed beef, chicken, and pork and accounts for about 23% of the total cattle capacity in the U.S. They are also the number two producer of poultry and pork.

Fears around shortages and escalating meat prices emerged, quickly quelled by the meat company that returned operations to normal capacity within two days. JBS USA Holding, Inc, based in Greeley, Colorado, is an owned subsidiary of JBS S.A.

The JBS Response to a Ransomware Attack

The ransomware attack caused operations in North America to come to a standstill at 13 of JBS’s meat processing plants as well as operations in Australia and Canada. The attack affected servers supporting IT systems.

According to the FBI, the hackers responsible for the ransom demand was REvil, a ransomware gang that may operate out of Russia. JBS paid the ransomware hackers approximately $11 million.

Meat Prices Continue Rising

With increasing demand already causing supply chain stresses, to say this cyberattack came at a bad time is an understatement. Of course, there is no good time for cyberbullies to pull the plug on a nation’s vital supply chain. Increasing animal feed costs, labor shortages, rising China imports, restaurants coming back online, and the start of barbeque season have all added to the supply shortages and corresponding rising costs.

Choice cuts of beef rose 1.1% the day following the attack. According to the USDA’s weekly national meet report, the week ending June 5 saw weekly choice cuts of beef rising to $338.56 per 100 pounds, increasing over $9 from the prior week.

The Effects of Rising Meat Prices on Restaurants

With only four major players in the meatpacking industry, JBS, Tyson, Cargill, and National Beef, the ramifications of one going down for an extended period are evident. Fortunately, this was not the case this time around.

Despite the limited impact, restaurants have been facing rising food costs for some time.

According to Buyers Edge Platform, food costs rose by 38% during the pandemic. The company analyzed $1.3 billion in restaurant purchases in February and May of 2020. The analyses revealed that the price of standard beef cuts rose by 87%, and fresh ground beef patties were up 81%, as reported by Business Insider.

Recently, wholesale beef tenderloin prices set a record at over $17 per pound, and ribeye came in at more than $13 a pound.

Amid a pandemic recovery, restaurants are left with the difficult decision to raise prices or change the menu.

America’s Response to Increasing Cyberattacks

While JBS is the largest ransomware-targeted food manufacturer, at least 40 other food manufacturing companies have been targeted since 2020, including G & J Gallo Winery.

Hackers, global businesses, and government agencies witness simple cyberattacks impacting critical infrastructure and supply chains. While seemingly removed, these attacks will affect the lives of most Americans. According to NPR, CrowdStrike, a cybersecurity technology company, witnessed more than 1,400 ransomware and data extortion incidents in 2020. Manufacturing, engineering, industrials, and technology companies experienced most of these attacks.

Emsisoft reported that the losses in 2020 going to ransomware gangs were in the tens of billions, with gangs hitting more than 500 health care centers, 100 government agencies, and about 1,680 educational institutions.

Currently, the electric, nuclear, and banking industries are the only sectors with cybersecurity requirements. While the White House may consider additional requirements for businesses in the critical infrastructure sectors, the lack of qualified individuals to tackle cybersecurity remains.

Additionally, the cost of new cyber technology in low-margin industries such as meat processing lays out another obstacle in the current ransomware epidemic.

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