Up to one-fifth of US beef and pork capacity may be shut down after the ransomware attack on JBS, the world’s largest meat processing company

In this Oct. 12, 2020 file photo, a worker heads into the JBS meatpacking plant in Greeley, Colo
In this Oct. 12, 2020 file photo, a worker heads into the JBS meatpacking plant in Greeley, Colo

  • Brazilian meat processing giant JBS is the latest major firm to suffer a ransomware attack.
  • JBS has over 64,000 meatpackers in the US and is responsible for a fifth of beef and pork capacity.
  • The White House says the attack originated in Russia and that the FBI is investigating.
  • See more stories on Insider’s business page.

JBS, the world’s largest meat processing company, has become the latest major firm to fall victim to a ransomware attack, bringing some production to a halt, the company said on Monday.

The Brazil-based meatpacker’s US operations are headquartered in Greeley, Colorado, and control an estimated one-fifth of the country’s slaughtering capacity for beef and pork. The company employs more than 64,000 workers in the US, many of whom are reporting cancelled shifts during the stoppage.

“On Sunday, May 30, JBS USA determined that it was the target of an organised cybersecurity attack, affecting some of the servers supporting its North American and Australian IT systems,” the company said in a Monday statement.

“Resolution of the incident will take time, which may delay certain transactions with customers and suppliers,” the statement said.

A White House spokesperson said JBS notified the US government about the attack, which is thought to have originated in Russia. The FBI is investigating, as well.

“Even one day of disruption will significantly impact the beef market and wholesale beef prices,” a livestock trade publication wrote, while analysts told Reuters that the disruption to JBS’s business could lead to higher prices for meat and potential shortages in some areas if the shutdowns continue.

On Tuesday, the US Department of Agriculture delayed its daily wholesale price report, citing “packer submission issues.” Agriculture markets rely on the data, but leaving JBS out of the report could reveal proprietary information about its competitors, Bloomberg reported.

Last month, a cyber attack on Colonial Pipeline’s billing system led to supply shocks across the southeastern US when the company chose to shut off service for several days. Colonial quickly paid the $4.4 million ransom to the hacker group Dark Side.

“This decision was not made lightly, however, one that had to be made,” Colonial CEO Joseph Blount said in a statement.

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US consumers face having to pay a lot more for beef as restaurants reopen and exporting increases

Livestock at a cattle market in Buenos Aires Argentina
Livestock at a cattle market.

  • Beef prices in the US spiked 5% between March and April, Reuters reported.
  • “The prices are astronomical,” a Louisiana real estate marketer told Reuters.
  • Members of Congress from South Dakota are calling for an investigation into the meatpacking industry.
  • See more stories on Insider’s business page.

The average price of a fresh cut of beef in the US reportedly spiked 5% between April and March.

In the last year, US prices were up 10%, Reuters reported, citing research from data firm NielsenIQ.

“The prices are astronomical,” a Louisiana real estate marketer told Reuters.

As the world tiptoed out of the pandemic, Americans were heading back to restaurants. That has increased demand, but it was just one of several factors putting upward pressure on beef prices, Reuters reported.

Beef prices reportedly were rising around the world, spurred in part by growing demand in China. US exports of beef were expected to rise 6 percent this year, fueled by increased consumption in Asia, according to data from the Department of Agriculture.

In the US, corn, and soybeans – common cattle feed – were at their highest prices in almost a decade, Reuters reported.

Meatpackers were also having difficulty finding and retaining employees.

“We have a high supply of cattle at one end of this equation and a high demand for US beef at the other, but the middle is being absolutely choked by the lack of processing capacity,” Ethan Lane, vice president of government affairs at the National Cattlemen’s Beef Association, said in a statement earlier this month.

Sen. John Thune and Rep. Dusty Johnson, both of South Dakota, have been calling for Washington to investigate what they say are anti-competitive practices and manipulation in the cattle market. They said meatpackers have been buying low from ranchers, then increasing prices for consumers.

Lane said, “Cattle producers deserve to know whether or not the price disparity that has plagued our market is the result of anti-competitive or other inappropriate practices in the packing sector.”

Thune and Johnson sent a letter to Attorney General Merrick Garland on May 17, seeking action from the Justice Department. Thune sent another letter to the Senate Judiciary Committee last week.

On Wednesday, Thune assigned some blame for rising prices to President Joe Biden’s administration, saying the current unemployment benefits are keeping potential meatpacking workers from seeking employment.

“And even now, with our country well on its way to full reopening, meatpackers are still not back to full capacity – at least in part, it seems, because the enhanced unemployment benefits the Biden administration is providing are not encouraging workers to come back to work,” Thune said.

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Nebraska Gov. Ricketts says he ‘doesn’t expect’ undocumented workers in meatpacking plants will be part of state’s vaccination plans

In this Friday, May 1, 2020, photo, a worker leaves the Tyson Foods plant in Waterloo, Iowa. The coronavirus is devastating the nation’s meatpacking communities - places like Waterloo and Sioux City in Iowa, Grand Island, Neb., and Worthington, Minn. Within weeks, the outbreaks around slaughterhouses have turned into full-scale disasters. (AP Photo/Charlie Neibergall)
In this Friday, May 1, 2020, photo, a worker leaves the Tyson Foods plant in Waterloo, Iowa. The coronavirus is devastating the nation’s meatpacking communities – places like Waterloo and Sioux City in Iowa, Grand Island, Neb., and Worthington, Minn. Within weeks, the outbreaks around slaughterhouses have turned into full-scale disasters. (AP Photo/Charlie Neibergall)

At a press conference on Monday, Nebraska Gov. Pete Ricketts signaled that undocumented workers in Nebraska’s meatpacking facilities would not be eligible to receive COVID-19 vaccines.

While holding the conference, Ricketts responded to a question about whether undocumented people could be vaccinated when the vaccine is made available to meatpacking workers, who are among Nebraska’s initial priority groups.

Referring to undocumented workers as “illegal immigrants,” Ricketts said, “You’re supposed to be a legal resident of this country to be working in the plants,” adding, “So I do not expect that illegal immigrants will be part of that vaccine program.”

 

 

Nebraska holds the nation’s largest meatpacking hub, and according to the Migration Policy Institute, some 66% of its meatpacking workers are immigrants, while at least 14% of the workers are undocumented. 

Since March, meatpacking facilities have at times become hotbeds for COVID-19 transmission, with workers standing in close proximity for hours and working indoors in dangerous conditions. Last month, Tyson Foods fired seven plant managers after an internal investigation confirmed that the managers bet on how many workers would become infected with COVID-19.

According to the Food and Environment Reporting Network, at least 52,157 meatpacking workers have tested positive for COVID-19 and at least 266 have died. 

The Midwest Center for Investigative Reporting clocked Nebraska as having the highest number of COVID-19 cases originating from meatpacking plants, with at least 5,267 workers contracting COVID-19.

Using news reports, company press releases, state and federal data, MCIR also registered that 22 meatpacking workers have died from COVID-19 in Nebraska, and there have been outbreaks at 23 different facilities in the state.

Nebraska’s vaccination program is still in Phase 1A, with more than 36,000 doses administered to frontline and healthcare workers, and Phase 1B is set to begin later this month. 

Gov. Ricketts’ office did not immediately respond to a request for comment.

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I’m a former poultry farmer. The meatpacking industry has failed workers during the pandemic and I’m not surprised by the deadly consequences.

poultry plant
Plant workers produce lean, finely textured beef (LFTB) at the Beef Products Inc (BPI) facility in South Sioux City, Nebraska, November 19, 2012.

  • Tyson Food executives in Iowa made bets on how many of their employees would contract COVID-19.
  • Meatpacking horror stories like these aren’t surprising for those of us in the industry.
  • The corporate level of this industry faces no accountability for their heinous actions.
  • Craig Watts is a former contract poultry farmer.
  • This is an opinion column. The thoughts expressed are those of the author.
  • Visit Business Insider’s homepage for more stories.

The COVID-19 pandemic has been devastating for America’s food workers, and nowhere is that more apparent than in the meatpacking industry.

USA Today reported last month that executives at the Triumph Foods meatpacking plant in St. Joseph, Missouri, lobbied government officials to keep the plant open at the height of the Spring coronavirus outbreak, a delay that led to hundreds of workers getting sick and at least two deaths. 

In Iowa, not only did Tyson Food executives keep their factory open, but they also allegedly made bets on how many of their workers would contract the virus. 

These are the latest examples of callous worker treatment by meatpackers – and of a failure of public agencies tasked with overseeing them. While this may be shocking to the general public, it isn’t surprising for those of us in the industry. I was a contract farmer for one of the biggest poultry companies in the US for 24 years. To me, this looks like standard operating procedure.

Par for the course

Nationally, more than 49,000 meatpacking plant workers have tested positive for COVID-19 and 253 have died.

Along with nursing homes and prisons, meat and poultry plants were the leading source of virus outbreaks in the spring. Workers on the processing line reported no way to social distance, no PPE, and no time to even cover a cough. But rather than quickly close the plants to control the outbreaks and establish safety measures, meatpacking companies dragged their feet. 

Shortly after the largest plants did finally close, an executive order from President Donald Trump deemed them “essential” and allowed them to re-open, but with no mandate for worker protections.

I first talked with poultry plant workers about a decade ago, when I was still raising chickens. They told me what they had been promised in the job and that the conditions were definitely not as advertised; about intimidation and pressure to keep their heads down; about being treated as expendable. 

This year, I’ve heard meatpacking workers, many of them immigrants and refugees, describe being afraid of the virus but even more afraid of speaking up. Speaking up could cost their job, and then how would they feed their family?

Take out my $500,000 mortgage on now-empty chicken houses, and we’ve got the same story.

Corporate Control

I wanted to raise chickens and raise a family, that was all. I signed a contract with a major poultry company in 1992 and built those houses. The company hooked me by promising that after ten years, my mortgage would be satisfied and I could really make money raising birds. As it turned out, getting the barns paid off in ten years was a pipe dream. Every year, there was some new technology they wanted me to invest in, and the understanding was that if I didn’t do it, I wouldn’t get more birds.

The company controlled everything: they sent the feed, told me what medicines to give. Sometimes they delivered flocks of sick birds and I wasn’t allowed to make real changes to improve their health. If I complained, I might not get another flock. I needed the birds to pay the mortgage, so I was stuck.

In 2014, I finally did speak up about how the contract required me to treat the birds. The company tried to intimidate and discredit me, showing up on my farm for audits at all hours. I finally quit in 2016, but clearly this was bigger than me.

I got involved with Rural Advancement Fund International-USA (RAFI-USA) and other groups advocating for common sense regulations for the meat and poultry industry so the power wasn’t 100% in the hands of the companies. However, the meatpackers fought tooth and nail against any little thing to change the status quo, and they kept winning. Under the Trump Administration, the federal Grain Inspectors, Packers, and Stockyards Administration, the  agency tasked with protecting contract farmers, was essentially eliminated when it was merged with another department in 2017.

I have seen again and again that when it comes to the big meatpacking companies, both federal and state oversight bodies act like customer service agencies instead of regulatory agencies. Customer service to the meatpackers, that is, not to the farmers or workers.

And here we are again. In October, a memo came out showing that meat industry lobby groups wrote parts of Trump’s executive order to re-open the plants. North Carolina Governor Roy Cooper backed off a pledge to release guidance for meatpacking plants due to industry pressure. Groups in Iowa have sued the state’s Occupational Health and Safety Administration (OSHA) saying the agency has not protected workers in several industries including meatpacking. The list goes on.

Meatpacking plant workers and farmers are both deemed “essential” in the pandemic. Why do we keep being treated instead as expendable, not only by the companies we work for, but by the very government agencies that are supposed to protect us?

Craig Watts is a former contract poultry farmer, who works part time as a farmer advocate at Rural Advancement Foundation International – USA (RAFI-USA).

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