Meat Shortage, Price Hike Possible After JBS Cyber Attack, Plant Shutdown: Experts

American shoppers may face meat shortage and price hikes after a cyberattack hit meatpacking giant JBS USA.

JBS USA -- an American subsidiary of a Brazilian meat processor -- suffered the cyberattack on its servers supporting IT systems across North America and Australia, forcing it to cut production.

On Tuesday evening, the United Food and Commercial Workers union announced that all JBS beef plants in the United States will shut down following the attack. But JBS later released a statement suggesting that its food plants would resume operations Wednesday.

“Our systems are coming back online and we are not sparing any resources to fight this threat. We have cybersecurity plans in place to address these types of issues and we are successfully executing those plans. Given the progress our IT professionals and plant teams have made in the last 24 hours, the vast majority of our beef, pork, poultry, and prepared foods plants will be operational tomorrow,” JBS said.

The meat packing company also said that it received a ransom demand from "a criminal organization likely based in Russia," according to White House spokeswoman Karine Jean-Pierre. The U.S. is now engaging with the Russian government on the matter. She also added that the FBI has launched an investigation into the cyberattack.

"The White House is engaging directly with the Russian government on this matter and delivering the message that responsible states do not harbor ransomware criminals," she said.

Several plants in North America were affected by the cyberattack, including those in Wisconsin, Utah, Colorado, Wyoming, and Utah. Experts are now warning about a potential shortage in meat supply and higher prices if the issue is not resolved soon.

"Even one day of disruption will significantly impact the beef market and wholesale beef prices," Steiner Consulting Group wrote in a note Tuesday. "Retailers and beef processors are coming from a long weekend and need to catch up with orders and make sure to fill the meat case. If they suddenly get a call saying that product may not deliver tomorrow or this week, it will create very significant challenges.”

The group also indicated that pork prices could increase, depending on how long the attack on JBS would limit pork supply.

Steve Meyer, an economist for Kerns and Associates, said that shoppers are unlikely to see the price increase if JBS can resolve the disruption within the next few days. "They would probably absorb those in the short run," Meyer said, adding: "As long as there was light at the end of the tunnel."

The recent cyberattack on JBS comes after DarkSide, a hacker group believed to be based in Eastern Europe, launched a ransomware attack on Colonial Pipeline, forcing the company to shut down 5,500 miles of its pipeline in the U.S.

The attack crippled gas delivery systems in Southeastern states and prompted widespread panic-buying. The ransomware attack also led to a rise in gas prices, reaching a national average of $3.04.