— This is the script of CNBC's news report for China's CCTV on June 2, 2021, Wednesday.
JBS, the new victim of cybersecurity attacks, is the world's largest meat supplier. Reuters reported that JBS's meat exports totaled $13.6 billion in 2020, within which about one-third went to China. Last year, more than half of U.S. beef exports to China were produced by JBS. The impact on the global meat market could grow if the issue stays unsolved. At this stage, North America and Australia are taking the brunt of the hit.
All of JBS's beef plants in the United States were forced to shut down because of the cyber-attack. JBS controls about 20% of the slaughtering capacity for U.S. cattle and hogs, according to industry estimates. The shut-downs are having an impact on markets. U.S. meatpackers slaughtered 22% fewer cattle on Tuesday than a week earlier, 18% less than a year earlier, according to the U.S. Department of Agriculture. The number of hogs slaughtered by pork processors decreased 20% from a week ago and 7% from a year ago. As a result, wholesale prices for beef and pork are climbing. Outside of the United States, some JBS plants in Canada were also reportedly closed. And in Australia, where JBS is the largest meat provider, thousands of JBS staff left idle on Monday and Tuesday.
According to JBS, their data backup system was spared from the attacks, which is lucky. They expect some plants to resume operation on Wednesday thanks to "significant progress" in dealing with the cyberattack. However, it may take longer for all plants to reopen. JBS is working with governments of related countries to try to solve the problem.
The attack on JBS is another major one after the Colonial pipeline attack in the United States and the healthcare system attack in Ireland. And the purpose for all of these attacks is the same, that is for money. Statistics show global ransom payment has been increasing year by year. It soared by 311% last year, approaching $350 million.
Whether or not the victim of cyberattacks should pay the ransom is a topic of debate. Colonial paid about $4.4 million to the hackers, but Ireland said they would not pay. A former official of U.S. National Intelligence told us in an interview that she opposes the idea of making a payment to hackers and calls for the government to step in.
Former principal deputy director of national intelligence
"I understand the impetus to pay the ransom to get your business back online. But I will tell you it is a losing game, because you have no idea where they are in your network and whether they're going to come back the next time. This is in a moment where the government got to get in and have some of these conversations and set standards, especially for public companies about what you pay and how you respond."
Right now, it is unclear how JBS plans to resolve the issue or chooses to pay the ransom. We will have updates for you as the story develops.