Why One Hack on One Firm Can Shake Global Meat Supply

In the last three years, a fire, a pandemic and now a cyberattack have disrupted the U.S. meat industry. The common thread between these very different incidents is that they show a highly concentrated market with little margin for error. A ransomware attack on JBS SA, the largest meat producer globally, at the end of May shut nearly a fifth of America’s meat production and idled JBS plants as far afield as Australia and Canada. The disruption raised anew questions of whether the dominance of a few giant companies has undermined resilience in the sector, and comes at a time when market concentration is being scrutinized in a wide range of fields.

In the U.S. beef industry, about 80% of cattle-slaughtering is done by four companies; in the U.S. hog market, the same number of firms account for more than 70% of capacity. Globally, red meat and poultry production has remained fragmented but the world’s biggest protein companies, including JBS and Tyson Foods Inc., have been expanding into Europe and Asia to meet surging demand. Meanwhile, Smithfield Foods Inc., the world’s largest pork producer, is owned by Hong Kong-listed WH Group.