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Largest Global Meat Processing Company JBS Cyber-Hacked By Ransomware

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JBS USA computer networks were hacked on Sunday, inducing temporary plant closures across the United States, Canada, and Australia. As a result, meat supply shortages prevail, affecting both consumers and workers. The situation comes only a month following the ransomware attack against Colonial Pipeline, which paid a ransom of $4.4 million to cyber-gang instigators. White House officials believe both cases are tied to Russia-based groups, however, this has not been confirmed. 

What We Know:

  • Ransomware attacks occur when criminal organizations hack into a company’s computer network system and threaten to delete or alter files unless compensation is offered. The United States government recommends not paying ransom settlements in order to prevent incentivizing cyber-criminal behavior. 
  • JBS operates in 15 countries with 150 plants worldwide, making it the largest supplier of meat to individuals and companies. JBS USA did not pay ransom to the criminal organization involved but closed all 9 of its processing facilities. 
  • JBS suspended all impacted IT systems, systems which it relies on for record-keeping, general management, regulation enforcement, employee payroll, plant standardization, labeling, and much more. JBS has not commented on the current plan to process carcasses left at facilities during the closure or ship the backup of processed meat to suppliers, however, most plants reopened June 2nd.
  • Principal Deputy Press Secretary Karine Jean-Pierre expressed the ransomware attack potentially originated in Russia. The White House is engaging directly with Russian government officials to discuss the attack, which Russia’s Deputy Foreign Minister Sergei Ryabkov confirmed.
  • On the demand side, closures affect consumers as well as large corporations such as Mcdonald’s that use JBS products. Most direct impacts include processing and shipping delays, however, some buyers question the meat safety and quality measures taken while plants remained closed.

    https://www.beefmagazine.com/livestock/covid-19-crisis-forces-partial-closure-jbs-souderton-plant

  • Aside from quality, time is a major concern for many buyers eager to stay on track. Companies reliant on routine product shipments may be left waiting, affecting restaurants, grocery stores, and ultimately, consumers. Beef, pork, and chicken prices are also projected to skyrocket, an indirect consequence of product shortages. 
  • Closed facilities left workers temporarily unemployed, a problem for workers living paycheck to paycheck. Worker and single mom Erika Gutierres told CNN, “It sounds, like, so small — ‘It’s two days off, get some rest.’ But to me, it’s the end of the world, because those two days were everything. I’m going to be short on all my bills, and that stresses me out and makes my life a lot harder.”

While US JBS facilities reopened Wednesday, the effects of closure are likely to persist until JBS facilities can once again supply meat products in a reliable manner.

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Business

Consumer Prices Increasing at Quickest Rate Since 2008

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For the second month in a row, consumer prices are increasing at historically significant rates following a spike in demand with shortages on the supply side.

What We Know:

  • In May 2021, inflation reached 5 percent, a level that erodes consumer purchasing power. With a short supply of products, everything from chicken wings to lumber, there is a higher demand than supply for products, which leads to inflated price levels. Consumers are forced to pay the higher prices set by companies for the same products.
  • During the pandemic, manufacturers cut production. The end of the pandemic means people are once again traveling, shopping for clothes, dining out, and driving to work. Manufacturers are now struggling to keep up.
  • Grocery stores saw a spike in prices during the initial March 2020 lockdown and have not gone back down to pre-pandemic levels since. Compared to last year, the food price index is up 2.2 percent. “Across a wide basket of the most popular 5,000 items, shoppers are paying +0.4 pts more for groceries in May of 2021 vs May of 2020,” said Phil Tedesco, vice president of retail intelligence analytics at NielsenIQ.

Source: NielsenIQ
Graphic: Robin Muccari / NBC News. Changes in grocery costs for the US.

  • The White House came out and addressed the inflation issue, considering the price hikes temporary. The Federal Reserve additionally addressed inflation, permitting the 5% inflation rate to help the US reach full employment. The Federal Reserve also signaled that ending some bond purchases will help tighten the monetary supply. The chief economist of Deutsche Bank, David Folkerts-Landau, however, expressed concern. “While it is admirable that this patience is due to the fact that the Fed’s priorities are shifting towards social goals, neglecting inflation leaves global economies sitting on a time bomb,” warning of a potential recession.

The White House, Federal Reserve, and economists have different approaches to the issue. That said, for the time being, consumers can expect to see higher prices and fewer goods.

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Business

Twitter Rolls Out New Subscription Service ‘Twitter Blue’, Includes Undo Tweet Function

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Photo by Twitter. Twitter's new subscription service allows subscribers to undo tweets, save bookmarks, consolidate text, customize the app, and reach specialized support teams.

Twitter, traditionally funded through advertisement revenue, is experimenting with new forms of income generation, including a monthly subscription service offering unique amenities.

What We Know:

  • Twitter made $3.7 billion in revenue in 2020 from advertising alone. Like many other social media platforms, Twitter profits by offering a free service and authorizing brands to advertise products on the platform. CEO Jack Dorsey doesn’t foresee a shift, stating, “We want to make sure any new line of revenue is complementary to our advertising business.”
  • Accordingly, the free version of Twitter remains, with Twitter Blue acting as a fully opt-in experience. Users are not required to sign up, Dorsey even suggesting that Twitter Blue is simply an early-stage test to determine what users want. It developed in response to user requests and complaints about the current platform.
  • Twitter Blue includes an “undo Tweet” function which permits subscribers to edit a tweet for up to 30 seconds before it is published on the platform. In other words, the 30-second window gives users the opportunity to correct or edit a post prior to public exposure.
  • Other features include the bookmark function, text consolidation, app design customization, and premium access to a customer support team. The bookmark function allows users to organize saved tweets into folders for later reference while “reader mode” consolidates long threads into easy-to-read paragraphs. Twitter declares it will “listen to feedback and build out even more features and perks for our subscribers over time,” a move that incentivizes users to pay the monthly subscription fee.
  • In Canada and Australia, the service costs $3.49 CAD and $4.49 AUD, respectively. It is not currently available in the United States and a roll-out timeline has not been announced.

The response to Twitter Blue in Canada and Australia will likely determine the roll-out timeline for other regions.

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Biden Reverses Trump’s Ban on TikTok and WeChat

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President Joe Biden signed an executive order that reversed and replaced former President Donald Trump‘s ban on TikTok and WeChat.

What We Know:

  • Biden’s new order instructs the Commerce Department to carry out a national security review of 10 apps with foreign ties. The Commerce Department must state what they consider as “unacceptable risks” and draft a report with recommendations on how to protect Americans’ data. Biden’s new executive order replaces the three executive orders signed by Trump in August 2020.
  • TikTok is a video-sharing app owned by Beijing-based ByteDance, and WeChat is a messaging app owned by Shenzhen-based Tencent. Both apps were under heavy scrutiny by the Trump administration, with the former president forcing U.S. companies to stop doing business with the Chinese ones. Trump also ordered ByteDance to sell TikTok to a U.S. company or risk the app being banned from all U.S.-based app stores. However, due to the challenges he faced with his executive orders, the ban was never enforced.
  • The Biden Administration has similar reservations as the Trump Administration, in that they believe China is trying to retrieve Americans’ information through measures that violate our national security. When questioned by the Trump Administration, TikTok maintained that their app doesn’t utilize the Chinese government, and all the data gathered on U.S. users is stored in the U.S. and Singapore.

“The Biden Administration is committed to promoting an open, interoperable, reliable, and secure Internet, protecting human rights online and offline and supporting a vibrant, global digital economy,” the White House voiced in a statement.

  • Biden’s new executive order does not affect the negotiations that TikTok is currently having with the Committee on Foreign Investment in the United States on various ways to protect U.S. user’s data. His administration has decided to suspend efforts to force the sale of TikTok and await the recommendations made by the Commerce Department.

Biden’s hope with his executive order is to protect all Americans’ data from collection and utilization by U.S. rivals.

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