Ransomware attacks continue to plague major U.S. and global companies, highlighting what is not a new form of economic terrorism. A little research on the frequency of these attacks in the last year reveals some startling data.
A cybersecurity group called Purplesec produces what it calls the "Breach Report," following cyberattack trends. The site recently reported that, since the beginning of the global pandemic, cybercrime as a whole increased 600%.
Two recent major breaches, the first on the Colonial Pipeline system and the second just last week on JBS, have been widely reported on. In both cases, corporate leadership opted to pay a sizeable ransom to criminals to get their systems back online quickly and to minimize loss and protect customer data.
JBS issued a statement confirming it paid a ransom in response to a criminal hack that affected its operations in the U.S. and Australia. The company said it was forced to halt slaughter operations in 13 of its meat processing plants, affecting about one-fifth of the U.S. meat supply. The ransom, $11 million, was reported to have been paid in Bitcoin. The FBI attributed the act to REvil, a group it implied has connections to Russia, saying they are a "Russian-speaking gang."
JBS USA reported it spends more than $200 million annually on IT, employing more than 850 IT specialists around the world. The company publicly acknowledged it made the decision to pay the ransom to "mitigate any unforeseen issues related to the attack and ensure no data was exfiltrated." The CEO of JBS USA said it had been a difficult decision, but it was made "to prevent any potential risk for our customers."
DTN Staff Reporter Todd Neeley wrote about the event in "JBS Plants Reopen After Cyberattack":
SHINING A LIGHT ON THE PROBLEM
There may be a positive outcome from the growing number of these types of attacks on U.S. and global businesses.
Don Close, a long-time, respected analyst in the cattle business serving as a senior animal protein analyst for Rabo AgriFinance in the RaboResearch food and agribusiness group, says more awareness may be just what the industry needs to move forward with solutions.
"I think there has been a lot more of this going on, and businesses paying ransoms, than we've been aware of," he told DTN Senior Editor Victoria Myers. "With the amount of attention the Colonial Pipeline hack got, and now the JBS hack, I think we are finally seeing this brought to the front of the table. That will hopefully mean more attention and more resources will be given to the problem, and a resolution can be developed."
Asked if the market is giving too much weight to these attacks, Close said it's notable that what would have been a short-term market impact a few years ago is today affecting prices for longer periods of time.
"Go back to the Tyson fire, and then follow that with the COVID disruptions from last year, and you'll see the market has been fully conditioned to ask what bad news is coming today. I think the initial reaction to the JBS shutdown was overdone.
"We have to look at the impact of these outside news events in light of the leverage imbalance we have in the market today, which by itself is going to direct the market toward an overreaction. I've heard others in the business say, and I think correctly so, that if these events took place in 2014 or 2015 when cattle supplies were incredibly tight, the market would have reacted, but it would have just moved on. Today, the whole leverage situation has become very influential in the amount of reaction we see in cattle markets to these kinds of events."
Just how much did the market react? DTN Livestock Analyst ShayLe Steward wrote there were substantial lost opportunities, not to mention wasted time dealing with the attack.
"From a technical standpoint, the live cattle complex only suffered one day of substantially lower trade, and cash cattle prices held steady for the sixth week in a row. But when we evaluate the cattle market, we can't just look at whether the day's prices are higher or lower and get a true image of how the market's conditions are faring -- we must dig much deeper."
To read more of ShayLe's thoughts on the matter, see "The Damage of the JBS Cyberattack Wasn't Too Bad, Right?": https://www.dtnpf.com/….
Victoria Myers can be reached at firstname.lastname@example.org
Follow her on Twitter @myersPF
(c) Copyright 2021 DTN, LLC. All rights reserved.