Big Beef Could Leave Food Supply Chain Vulnerable To Hackers
A massive hacking incident against beef processing giant JBS caused an estimated 20% of U.S. beef packing plants to grind to a halt earlier this week. JBS was quick to get things back online, but the attack raises questions about cyber security and market consolidation.
Cattle ranchers across the region have expressed concerns about certain companies getting too much power and affecting too much of the market. According to USDA estimates, only four companies control about 80% of the beef processing market.
“I think there’s a concern in the cattle industry of putting all your eggs in just too few baskets,” said Eric Belasco, an agricultural economics professor at Montana State University.
Belasco added that streamlined processes can be good for ranchers, but disruptions aren’t.
“While they do enjoy economies of scale delivering some of these products to consumers at lower prices. I think also the volatility from having this concentration is a growing concern,” he said.
Beyond that, lawmakers like Montana Sen. Jon Tester are calling for renewed investigations into the largest beef processors, including JBS, for price fixing during the chaos of the pandemic. That is, allegations the companies used plant slowdowns to pay ranchers even less and made more off of sales.
Big corporations have caused independent ranchers to go broke while beef prices rise at the grocery store—that math just doesn't add up.— Senator Jon Tester (@SenatorTester) June 2, 2021
I'm calling on DOJ to investigate consolidation in the cattle industry. Otherwise, our independent ranchers could go out of business for good. pic.twitter.com/iivtI0qJO3
Tester said in a statement that “...this (cyber) attack is a perfect example of why continued consolidation in the meat industry poses such a direct threat both to Montana’s ranchers and consumers and to our national security. Due to irresponsible market consolidation, a single incident can threaten our nation’s entire food supply, giving our adversaries an easy target and causing significant disruptions across the country.”
The North American Meat Institute has argued that they need ranchers as much as ranchers need them, though, and that antitrust regulations have successfully kept them from getting too big. They also recently argued that the market is doing fine, and that independent packers are growing in number, though it’s still a small overall percentage.
“The Meat Institute will continue to work with livestock producer organizations to ensure proposed changes to the beef markets do not have unintended consequences for producers and consumers,” they said in a statement.
The U.S. Department of Justice didn’t respond to questions about the status of their investigation, but had been investigating alleged beef price fixing last year without any word about when the investigation might wrap up.
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUNR in Nevada, the O'Connor Center for the Rocky Mountain West in Montana, KUNC in Colorado, KUNM in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.