Hackers Halt America’s Beef Supply

It looks like the pipeline hack that occurred a month ago was just the first shot in what’s going to be a uniquely 21st-century theater of conflict. 

Over the past weekend, JBS SA (OTC: JBSAY), the world’s largest meat producer, had to shut down all of its beef plants in the U.S. due to a ransomware attack. 

We saw the same thing with Colonial Pipeline last month. 

The JBS problem was resolved quickly, and many of the affected facilities were back in operation within days. But that this happened on the scale that it did so soon after a similar attack just goes to show how common this is likely to become. 

The problem wasn’t just related to operations here in the U.S. either. Some of JBS’s operations in Australia and Canada were also affected. 

This comes at a time when much of the world is grappling with questions related to food security and the pandemic leaving a mark on the food industry that it’s still recovering from. 

With food and energy being two of the most critical sectors of the world economy, government officials are right to worry about the reach and suddenness with which these attacks come. 

Since May of last year, there have been more than 40 ransomware attacks against food companies, and those are just the ones that are publicly reported. 

Like the Colonial Pipeline hack, this attack has been connected to a Russia-linked group. This group, REvil, was previously known for attacking a company called Quanta Computer, which supplies Apple with components. In that attack, the group stole product blueprints and leaked some with the promise to release more if Apple didn’t pay the ransom. 

Those stolen schematics were later removed from the group’s ransomware site, as were all references to the extortion attempt. It isn’t clear what prompted the removal and the truth is unlikely to ever be made public, but REvil has been increasingly active in the time between that attack and the one against JBS. 

It’s one of many such groups with links to Russia and that fact is sure to influence the way President Biden navigates foreign policy during his term. 

His administration has already stated that the President intends to confront Russian President Vladimir Putin about how the country harbors these kinds of criminal groups when the two meet in Switzerland in a few weeks. 

Whether or not Putin plays a role in directing these groups isn’t known. What officials are certain of is that some members of these groups have worked for Kremlin security services. 

Whatever the case may be, it shows that challengers to the U.S. on the world stage know that the country’s infrastructure is vulnerable and that attacking it is one way to hurt the country without firing a single weapon. 

The havoc that can be caused by disrupting critical sectors like power, food, health care, tech, and many others can be felt by citizens from all walks of life. 

The retaliation, namely sanctions and condemnation in the public eye, amount to a slap on the wrist in comparison. 

This does little to deter state actors and unaffiliated groups looking to either make money or build their reputations.

President Biden, and any presidents who come after him, will have to make sure that the country’s critical infrastructure is safe and secure from intrusion.  At the same time, they will have to balance this with playing nice with leaders of rival nations who have no interest in being allies.

The Biden administration has already warned that American businesses need to start taking cybersecurity more seriously. Companies in a wide range of sectors are taking that warning to heart and are beginning to review their security measures and take steps to protect their data. 

With Biden’s foreign policy approach seemingly more antagonistic towards Russia than Trump’s was, hacker groups linked to Russia will likely intensify their efforts to disrupt America’s way of life. 

That’s why you shouldn’t be surprised when investment opportunities to protect critical sectors like food, health care, and infrastructure pop up over the next few months.

Keep your eyes open,

Ryan Stancil
Editor, Daily Profit Cycle

Ryan Stancil is an editor and regular contributor to Daily Profit Cycle. He’s been active in the financial publishing industry for more than half a decade, offering insights and commentary on technology and geopolitics to help readers make sense of the constantly changing landscape and how it affects their investments. His readers appreciate his "tell it as it is" writing style, where he always offers a fresh new perspective on what's happening in the market and leaves nothing unsaid.