|CME||CME GROUP, INC.||210.71||-6.29||-2.90%|
In trading on the CME, futures fell over 3%, before curbing some of those losses, as traders attempt to handicap the potential disruption to both the U.S. and global food supply while reports circulate JBS may be shutting down plants in the U.S. and Australia.
On Monday, the company stated, "JBS USA determined that it was the target of an organized cybersecurity attack, affecting some of the servers supporting its North American and Australian IT systems... resolution of the incident will take time, which may delay certain transactions with customers and suppliers."
On Tuesday, there were reports production facilities in both the U.S. and Australia were taken offline. Inquires by FOX Business to JBS were not returned at the time of publication.
The White House is also working in tandem with the FBI and the U.S. Department of Agriculture to monitor the situation.
"USDA has reached out to several major meat processors in the United States to ensure they are aware of the situation. We're assessing any impacts on supply and the president has directed to the administration to determine what we can do to mitigate any impacts as they may become necessary" said Karine Jean-Pierre, principal deputy press secretary.
She also said Russia is likely behind the attack.
"In the last day, JBS notified the administration that the ransom demand came from a criminal organization likely based in Russia. 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," she stated.
If the JBS hack isn’t solved soon it could cause very tight supplies for beef and pork and much higher costs for restaurants. It could also cause shortages of beef and pork like we saw at the beginning of the COVID-19 pandemic. Worst case scenario; restaurants could start to limit supply and we could see shortages if the producer is down for an extended period.
JBS is the latest critical business to find itself immobilized following a cyberattack after Colonial Pipeline also a victim of Russian hackers connected to the group DarkSide.
The largest fuel pipeline in the country was taken offline, sparking gasoline shortages and panic buying up and down the Eastern seaboard. The company's CEO caved and paid a $4 million to $5 million ransom to free his systems and get fuel flowing again.
The attack was a wake-up call and a reminder to many just how vulnerable America is to this type of attack.
Yet the bigger issue is the attack itself. We cannot let both our food and energy supply chain be held hostage by these pirates putting lives at risk.
Phil Flynn is senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at email@example.com.