U.S. officials said the Labor Department had seen a nearly 70 per cent increase in child labour violations since 2018, including in hazardous occupations. In the last fiscal year, 835 companies were found to have violated child labour laws.

U.S. officials told reporters on a Monday conference call that the administration was probing the employment of children at companies including Hearthside Food Solutions and suppliers to Hyundai Motor Co. It has created an interagency task force on child labour, and plans to target industries where violations are most likely to occur for investigations.

The Democratic administration of U.S. President Joe Biden is also pushing for heavier penalties for companies that violate these laws, and more funding for enforcement and oversight, they said. U.S. federal law prohibits people under age 16 from working in most factory settings, and those under 18 are barred from the most dangerous jobs in industrial plants.

“This isn’t a 19th century problem, this isn’t a 20th century problem, this is happening today,” said one of the officials on the call. “We are seeing children across the country working in conditions that they should never ever be employed in the first place.”

The maximum civil monetary penalty is currently just US$15,138 per child, the administration noted in a press release, a figure that’s “not high enough to be a deterrent.”

The U.S. Department of Labor (DOL) opened an investigation into Hearthside Food Solutions, a U.S. food contractor that makes and packages products for well-known snack and cereal brands, for reportedly employing underage workers and violating child labour laws, officials confirmed on the call.

Reuters reported the DOL’s investigation into Hearthside earlier on Monday.

The company came under scrutiny following a New York Times investigation that said Hearthside’s factories employed underage workers making Chewy granola bars and bags of Lucky Charms and Cheetos, which the company would later ship around the country.

It was not clear whether the probe will lead to criminal charges, fines or other penalties. Hearthside said in a statement the company would “work collaboratively with the Department of Labor in their investigation and do our part to continue to abide by all local, state and federal employment laws,” and that they were “appalled” by the report alleging child labour at their company.

The Hearthside investigation is the latest in a rise in similar probes. Reuters last year published a series of stories on child labour including revelations about the use of child labour among suppliers to Hyundai, including a direct subsidiary of the Korean auto giant, in the U.S. state of Alabama.

The first story in the Reuters series, published in February last year, uncovered young teens working in dangerous chicken processing plants in Alabama.

Earlier this month, a major food safety sanitation company paid US$1.5 million in penalties for employing more than 100 teenagers in dangerous jobs at meatpacking plants in eight states, following another Labor Department investigation.

As Reuters previously reported, a record number of unaccompanied migrant minors entered the country in recent years, with many entering federal shelters and then released to sponsors, usually relatives, while immigration authorities resolve their requests for refuge in the U.S.

But authorities are struggling with long-term follow-up to prevent minors from being sucked into a vast network of enablers, including labour contractors, who recruit workers for big plants and other employers. At times they have steered kids into jobs that are illegal, grueling and meant for adults. The majority of minors Reuters found working were from Central America.

Separately, the Biden administration said earlier this year it will speed up the deportation relief process for immigrants in the U.S. illegally who witness or experience labour abuses.

“We also absolutely need to protect workers who do come forward and participate in wage and hour and other worker protection investigations and activities,” one official said on the Monday call.

— Reporting for Reuters by Nandita Bose in Washington and Mica Rosenberg in New York; additional reporting by Kristina Cooke in San Francisco and Joshua Schneyer in New York.

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Speaking to reporters outside a fire station on Nantucket Island, Massachusetts, during a Thanksgiving holiday visit, Biden declined to provide details on how the talks were going because it was “the middle of negotiations.”

“My team has been in touch with all the parties, and in (a) room with the parties and I have not directly engaged yet because they’re still talking,” Biden said.

More than 300 groups, including the National Retail Federation and the National Association of Manufacturers, urged Biden last month to get involved to help avoid a strike that could idle shipments of food and fuel while inflicting billions of dollars of damage to an already struggling national economy.

Earlier this week, several of these groups renewed calls for Biden and Congress to swiftly intervene to prevent a strike or employer lockout ahead of the holiday season.

A rail traffic stoppage could freeze almost 30 per cent of U.S. cargo shipments by weight, stoke inflation and cost the U.S. economy as much as US$2 billion per day by unleashing a cascade of domestic and international transport woes affecting the energy, agriculture, manufacturing, healthcare and retail sectors.

On Monday, workers at the largest U.S. rail union voted against a tentative contract deal reached in September, raising the possibility of a year-end strike.

Labour unions have criticized the railroads’ sick leave and attendance policies and the lack of paid sick days for short-term illness. There are no paid sick days under the tentative deal. Unions asked for 15 paid sick days and the railroads settled on one personal day.

The Biden administration helped avert a service cutoff by hosting last-minute contract talks in September that led to the tentative contract deal.

Canadian National Railway (CN), which owns a significant amount of U.S. track with employees represented by the affected unions, is a party to the U.S. railways’ organization for “multi-employer national bargaining.”

U.S. railways represented by the U.S. National Carriers’ Conference Committee (NCCC) also include BNSF, CSX, Norfolk Southern and Union Pacific — as well as Kansas City Southern, which is still in the midst of a merger with Canadian Pacific Railway (CP).

CP itself, however, is not a party to the NCCC and is not involved in those labour talks.

— Reporting for Reuters by Nandita Bose and Humeyra Pamuk. Includes files from Glacier FarmMedia Network staff.

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A notorious Russia-linked hacking group is behind the cyberattack against JBS, a source familiar with the matter said.

Brazil’s JBS controls about 20 per cent of the slaughtering capacity for U.S. cattle and hogs, so the plants’ reopening should prevent a severe supply-chain disruption.

JBS, the world’s largest meatpacker, said most operations resumed on Wednesday, “including all of our pork, poultry and prepared foods facilities around the world and the majority of our beef facilities in the U.S. and Australia.”

“We anticipate operating at close to full capacity across our global operations tomorrow,” JBS USA CEO Andre Nogueira said in a statement.

The cyberattack followed one last month by a group with ties to Russia on Colonial Pipeline, the largest fuel pipeline in the United States, which crippled fuel delivery for several days in the U.S. Southeast.

It is the third major attack this year tied to Russia, and White House press secretary Jen Psaki said on Wednesday the JBS hack was expected to be discussed at President Joe Biden’s mid-June summit with Russian President Vladimir Putin.

“We’re not taking any options off the table in terms of how we may respond, but of course there’s an internal policy review process to consider that. We’re in direct touch with the Russians, as well, to convey our concerns about these reports,” Psaki added.

“President Biden certainly thinks that President Putin and the Russian government has a role to play in stopping and preventing these attacks.”

The Russia-linked cyber gang goes by the name REvil and Sodinokibi, the source said.

Cybersecurity investigators have said they believe some members of the REvil ransomware team are based in Russia. The prolific ransomware group, perhaps best known for attacking an Apple Inc. supplier named Quanta Computer earlier this year, previously posted in Russian on cyber-crime forums, marketing stolen data.

In the Quanta Computer case, the hackers sent extortion threats and demanded a payment of US$50 million for the company to regain access to its systems.

Over the past few years, ransomware has evolved into a pressing national security issue. A number of gangs, many of them Russian speakers, develop the software that encrypts files and then demand payment in cryptocurrency for keys that allow the owners to decipher and use them again.

Scrambling for beef

With North American operations headquartered at Greeley, Colorado, JBS sells beef and pork under the Swift brand, with retailers such as Costco carrying its pork loins and tenderloins.

U.S. beef and pork prices are already rising as China increases imports, animal feed costs rise and slaughterhouses have confronted a labor shortage since COVID-19 outbreaks shut down many U.S. meat plants.

“It’s probably going to be pretty tight for the next few days because even though they (JBS) are going to start opening … who knows how they are going to run,” said Altin Kalo, economist at Steiner Consulting Group. “There’s a fair amount of people that are scrambling (for beef supplies).”

U.S. meatpackers on Wednesday slaughtered 12.5 per cent fewer cattle than a week earlier and eight per cent less than a year earlier, although slaughtering was up about 12 per cent from Tuesday, according to estimates from the U.S. Department of Agriculture.

Plants are expected to return to full capacity in the next couple days, said officials with the United Food and Commercial Workers (UFCW) International Union, which represents over 25,000 JBS meatpacking workers.

JBS also owns most of chicken processor Pilgrim’s Pride, which sells organic chicken under the Just Bare brand.

The company’s operations in Brazil, Mexico and the U.K. were not affected by the attack, JBS said.

Chicago Mercantile Exchange (CME) cattle futures rose on Wednesday after tumbling on Tuesday as the JBS plant shutdowns prevented farmers from delivering their cattle to slaughter plants.

The attack drew attention to the concentrated beef sector in the United States, where four companies including JBS slaughter over 80 per cent of fed cattle and shutdowns of slaughtering plants have a severe impact on prices that ranchers are paid for their cattle.

“The Justice Department needs to take a serious look into the meatpacking industry, and if they cannot, Congress needs to pass reforms that protect a fair and open cattle market,” U.S. senators led by Republican Mike Rounds of South Dakota and Democrat Tina Smith of Minnesota wrote in a letter to Attorney General Merrick Garland.

— Reporting for Reuters by Tom Polansek and Julie Ingwersen in Chicago and Nandita Bose in Washington, D.C.

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The world’s largest retailer applied for six patents last year on drones that aim to prevent damage to crops, control pest attacks on farms and cross-pollinate plants, according to U.S. Patents and Trademark Office documents that were made public last week and seen by Reuters.

Groceries make up 56 per cent of the company’s total revenue and Walmart may see drone technology as one way to get food from farms to store shelves faster and more cheaply to compete with Amazon.com, following its purchase of Whole Foods Market last year and the expansion of discount chains like Aldi and Lidl.

In one application, Walmart seeks to patent a system that would use drones to identify crop-damaging pests and then dispense insecticides on the critters. Another suggests the use of drones carrying pollen dispensers to successfully pollinate crops.

Using technology to precisely apply pesticides rather than spraying entire fields can benefit the environment and save money for farmers. As part of a sustainability push in recent years, Walmart has also worked with suppliers to reduce the amount of fertilizer used to grow crops because it can pollute the environment.

Walmart spokeswoman Molly Blakeman said the company always looks for new ways to serve shoppers better but had no comment on the filings. The retailer applies for dozens of patents a year and many do not result in commercial products.

Walmart previously applied for a patent involving drones that could monitor crops’ growing conditions and send data to stores about when and from where produce might arrive, said Zoe Leavitt, a senior analyst from data intelligence firm CB Insights, which analyzes corporate patent filings.

The series of six applications indicates Walmart is looking into farming more seriously, she said.

Walmart has so far applied for 46 patents for using drone technology, mostly to facilitate its delivery and logistics operations, or for use within warehouses to do things such as track inventory, according to data from CB Insights.

In U.S. agriculture, drones are most often used to survey farms that can span hundreds of acres. The devices fly above fields and take photos that help growers estimate the size of upcoming harvests or identify problems, such as weed infestations and nutrient deficiencies.

Other industries have also turned to drones, with AT+T using the devices to look at cellphone towers in Texas last year after Hurricane Harvey. Insurers such as Allstate use them to assess property damage.

“The technology is very powerful and using that to control the supply chain as far out as possible will offer Walmart a distinct advantage over rivals,” said Bill Bishop, co-founder of retail consultancy Brick Meets Click.

The market for agricultural drones will top $1 billion by 2024, up from about $338 million in 2016, according to research firm Global Market Insights (all figures US$).

However, Walmart’s patent applications stand out because they indicate the company sees greater potential to address problems on farms, rather than simply spot them, said David Dvorak, CEO for Field of View, a U.S. company that sells drone camera systems.

“It sounds like Walmart is trying to develop a complete system that can actually do something about it,” Dvorak said.

The patent push involving agricultural technology harks back to McDonald Corp.’s efforts in the 1960s to patent the processing of potatoes into French fries so it could reliably deliver consistent quality fries at the lowest cost in massive volumes.

“Companies like Walmart for a long time have created sustainability initiatives and this is really where the rubber is meeting the road,” said Jayson Lusk, head of agricultural economics at Purdue University.

Such environmental-focused initiatives can be attractive to consumers, Lusk said. Eventually Walmart, which is courting more urban, higher-income and health-conscious shoppers for their online grocery business, could require suppliers to buy food from farmers who use agricultural technology to reduce chemicals to produce crops, he said.

“A way how this might come down is the imposition of standards on their suppliers,” Lusk said.

— Nandita Bose and Tom Polansek are Reuters reporters covering the U.S. retail sector from New York and agribusiness from Chicago respectively.

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