The US Department of Agriculture entered into a stipulation agreement with Cox Livestock Inc. and Duke Cox of Cedar City, Utah, on Nov. 18, 2024, for alleged violations of the Packers and Stockyards Act. Under the terms of the stipulation agreement, Cox waived his right to a hearing and paid a civil penalty of $4,000.

An investigation by USDA’s Agricultural Marketing Service revealed that Cox Livestock Inc. had shortages in its custodial account of $101,160 on May 31, 2023, and $261,586 on June 30, 2023. The custodial account shortages were due in part to the market’s failure to reimburse uncollected receivables. Federal regulation requires reimbursement of the custodial account for uncollected receivables by the close of the seventh day following the sale of livestock. 

Custodial accounts are required for all livestock market agencies selling livestock on a commission basis. These custodial accounts are designated to receive and holding proceeds from the sale of livestock in trust for sellers. Failure to timely reimburse a custodial account is a violation that subjects the violator to sanctions prescribed by the P&S Act and regulations.

The P&S Act authorizes the secretary of agriculture to initiate action seeking various sanctions, including orders to cease and desist from continuing violations, suspension of registration where applicable and other remedies as authorized and appropriate under the act. USDA may offer alleged violators the option of waiving their right to a hearing and entering into a stipulation agreement to quickly resolve alleged violations.

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.

Source: USDA's AMS