The world's largest meat producer and the second-largest producer of beef, pork, and poultry in the United States, JBS (OTCMKTS: JBSAY), a Brazil-based company, has been the victim of a recent cyberattack that happened May 30. The reason: ransomware demands. The cyberattack was resolved shortly, over one weekend, but this raises questions as to the security of the entire meat processing industry that's woefully behind the times when it comes to cybersecurity.
The food and agriculture industry accounts for about a fifth of America's economy. What happens to it also affects the restaurant and grocery industries.
Agriculture is an old-school industry, literally, as it dates to colonial America. Of course, the agriculture business has adopted new machinery and technology over the years to aid production. But this industry hasn't fully embraced cybersecurity in our digital age.
In late May, the University of Minnesota warned the U.S. Agriculture Department about the growing threat of ransomware, an attack that blocks access to a computer system until the owners pay a sum of money -- a ransom. Ransomware and other cyberattacks can create chaos in the U.S. food supply, such as higher food prices and even food contamination.
The May ransomware warning came true when JBS was attacked by hackers, forcing the meat processing plant to shut down its online operations. Although the business was back online within a matter of days, this incident exposes how vulnerable the entire food industry is regarding lack of cybersecurity.
The meat industry goes digital
The threat of hackers shutting down the meat industry is a real and growing concern, as this industry increasingly relies on digital technologies. Farmers are using data collection tools to farm better. Meat packers are interacting with customers, such as Kroger and Amazon, to have a better supply chain channel through digitization (a process that connects the parties involved through a single digital network). Robotics is being used to automate farming machinery, such as feeding and milking livestock. And there are many other ongoing technological developments farmers are using, like drones and soil sensors.
Not enough being done for protection
As the food industry goes digital, vulnerabilities have been exposed, despite recent and past warnings that date back years regarding the lack of cybersecurity. This is alarming when you consider how high the stakes are: Everybody needs to eat.
The USDA, which oversees this industry, is woefully behind in its own cybersecurity. Homeland Security found in 2019 extreme cyber vulnerabilities at the USDA, dating back over a decade. So it's not much of a surprise the USDA fell down on this aspect of its regulatory mission: ensuring Americans have safe food to eat.
Too busy to care
Cyberattacks are rising in the food industry. Crowdstrike, a cybersecurity technology company, found a tenfold increase in "keyboard intrusions" (hacking) affecting the agricultural industry. Digital advances in this industry are helping productivity, but these advances come at a high price: the threat of hackers shutting down the industry, or at least big parts of it.
The Millionacres bottom line
If you thought COVID-19 did a number on disrupting the food supply by shutting down slaughterhouses, you haven't seen anything yet if more ransomware attacks happen that could shut down plant operations across the country.
This latest attack lasted only for a weekend, but if a closure lasts a week or more for a big company like JBS, it would be serious. This industry would be wise to get digitally prepared on its own before serious governmental regulations might come about. Investors in this sector of commercial real estate should be asking when cybersecurity will be more than an afterthought for the agriculture industry.