The U.S. Department of Agriculture (USDA) recently settled three separate Packers & Stockyard (P&S) Act cases.
The P&S Act is a fair-trade practice and payment protection law that promotes fair and competitive marketing environments for the livestock, meat, and poultry industries.
First case: USDA entered into a stipulation agreement with Lewiston Livestock Market Inc. of Lewiston, Idaho (Lewiston), on July 28, 2022, for alleged violations of the Packers and Stockyards (P&S) Act. Under the terms of the stipulation agreement, Lewiston waived its rights to a hearing and paid a civil penalty of $4,000.
An investigation by USDA’s Agricultural Marketing Service (AMS) found that Lewiston failed to maintain its custodial account, resulting in a custodial shortage of $165,298 on Dec. 31, 2021, and $70,795 on Jan. 31, 2022. The custodial shortages resulted from the failure of Lewiston to timely reimburse the custodial account.
A custodial account is a trust account designated for shippers’ proceeds from the sale of consigned livestock maintained for sellers. Failure to reimburse the custodial account timely is a violation of the Packers & Stockyards Act and regulations.
Second case: USDA entered into a stipulation agreement with Circle C Land, Cattle & Equine, LLC, doing business as Cattlemen’s Livestock Exchange (Circle C), and Jeremy Cox (Cox) of Independence, Ark., on June 27, 2022, for alleged violations of the Packers and Stockyards (P&S) Act. Under the terms of the stipulation agreement, Circle C and Cox waived their rights to a hearing and paid a civil penalty of $3,250.
An investigation by USDA’s Agricultural Marketing Service (AMS) found that Circle C and Cox had custodial account shortages on Jan. 14, 2022, and March 4, 2022, of $112,263 and $86,653, respectively. Circle C misused the custodial account by using funds to repay its Line of Credit.
Third case: USDA entered into a stipulation agreement with Victoria Livestock & Poultry Market LLC of Newark, N.J., (Victoria) on July 15, 2022, for alleged violations of the Packers and Stockyards (P&S) Act. Under the terms of the stipulation agreement, Victoria waived its rights to a hearing and paid a civil penalty of $4,200.
An investigation by USDA’s Agricultural Marketing Service (AMS) revealed that Victoria failed to pay for its livestock purchases promptly. Victoria failed to pay when due for livestock on 19 transactions, totaling $853,200 between Dec. 6, 2021, and March 14, 2022. The late payments ranged between 3 to 66 days late.
The P&S Act requires subject entities to issue the full payment for livestock by the close of the first business day following purchase and transfer of possession. Failure to timely pay for livestock purchases is a violation of the P&S Act.
The P&S Act authorizes the Secretary of Agriculture to assess civil penalties up to $29,616 per violation against any person after notice and opportunity for a hearing on the record. USDA may offer alleged violators the option of waiving their right to a hearing and enter into a stipulation agreement to resolve alleged violations quickly.
For further information about the P&S Act, contact Kraig Roesch, Packers and Stockyards Division, at (303) 375-4291 or by email at kraig.roesch@usda.gov.
Source: USDA
