Chicago | Reuters — Chicago Mercantile Exchange (CME) cattle futures tumbled on Tuesday after JBS stopped slaughtering at U.S. plants because of a cyberattack.
Brazil’s JBS told the U.S. government that a ransomware attack on the company originated from a criminal organization likely based in Russia, according to the White House.
It is not known when JBS will resolve the cyberattack and resume operations at U.S. plants. The disruption quickly affected the beef market, industry analysts said.
JBS and three other beef packers in the U.S. account for the purchase and slaughter of about 85 per cent of all fed cattle.
CME August live cattle futures ended down two cents at 116.6 cents/lb. and hit their lowest price since Jan. 12 (all figures US$). August feeder cattle touched its lowest price since May 7 and closed 2.2 cents weaker at 149.15 cents/lb.
Prices for choice cuts of beef shipped to wholesale buyers in large boxes jumped $3.59, to $334.56 per hundredweight, according to the U.S. Department of Agriculture. Prices for select cuts climbed $5.55, to $306.45/cwt.
U.S. meatpackers slaughtered 94,000 cattle on Tuesday, down 22 per cent from a week earlier and 18 per cent from a year earlier, according to USDA estimates. Pork processors slaughtered 390,000 hogs, down 20 per cent from a week ago and seven per cent from a year ago.
The cyberattacks frustrated livestock producers, who are unable to deliver cattle and hogs that are ready for slaughter to JBS plants while they are closed.
Before the hack, cattle feeders complained about missing out on huge profit margins enjoyed by beef processors like JBS.
Last year, cattle and hog farmers suffered as COVID-19 outbreaks temporarily closed slaughterhouses, backing up livestock on farms and in feed lots.
In the pork market, CME July lean hog futures set a contract high and ended up 0.3 cent at 119.65 cents/lb.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.