USDA settles Packers and Stockyards cases
USDA enters into three stipulation agreements.
The U.S. Department of Agriculture entered into a stipulation agreement with Pilgrim’s Pride Corp. on Aug. 30, 2023, for alleged violations of the Packers and Stockyards (P&S) Act. Under the terms of the stipulation, Pilgrim’s Pride waived its rights to a hearing and paid a civil penalty of $3,750.
An investigation by USDA’s Agricultural Marketing Service revealed Pilgrim’s Pride failed to pay five poultry growers timely at its Lufkin and Nacogdoches, Texas, processing facilities from April 2022 through September 2022. Payments were four days late.
The P&S Act requires subject entities obtaining live poultry by purchases in a cash sale or subject entities obtaining live poultry under a poultry growing arrangement to issue the full payment by the next business day following the purchase of the poultry, or before the close of the fifteenth day following the week in which the poultry is slaughtered. Failure to timely pay for purchases and failure to issue the full payment for purchases is an unfair trade practice and a violation of the P&S Act.
The P&S Act authorizes the secretary of agriculture to assess civil penalties, up to $33,896 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.
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.
For further information about the Packers and Stockyards Act, contact Dora Malykin, Packers and Stockyards Division, at 202-720-7051 or by email at dora.malykin@usda.gov.
The U.S. Department of Agriculture entered into a stipulation agreement with Salem Livestock Inc. on Aug. 23, 2023, for alleged violations of the Packers and Stockyards Act. Under the terms of the stipulation, Salem waived its rights to a hearing and paid a civil penalty of $5,500.
An investigation by USDA’s Agricultural Marketing Service revealed that Salem operated with custodial account shortages on May 31 and June 30, 2021, of $1,187,353 and $964,800, respectively. The custodial shortages were due in part to the market failing to reimburse the custodial account by the close of the next business day for the market owners' and employees’ purchases, and failing to reimburse the custodial account for uncollected receivables by the close of the seventh day following the sale. AMS also found Salem misused custodial funds by issuing payments to its line of credit and deducting bank fees directly from its custodial account.
A custodial account is a trust account designated for shippers’ proceeds from the sale of livestock in trust for sellers. Failure to reimburse and debit the custodial account properly is a violation of the Packers & Stockyards Act and regulations.
Windsor Livestock Auction Co. Inc.
The U.S. Department of Agriculture entered into a stipulation agreement with Windsor Livestock Auction Co. Inc. on Aug. 30, 2023, for an alleged violation of the Packers and Stockyards Act. Under the terms of the stipulation agreement, Windsor waived its rights to a hearing and paid a civil penalty of $600.
An investigation by USDA’s Agricultural Marketing Service revealed that Windsor failed to have its scale tested in 2022. Windsor tested its scale Dec. 21, 2021, and continually weighed livestock throughout the 2022 calendar year without the scale being tested.
The P&S Act requires subject entities to test livestock scales used in commerce at least once between January 1 and June 30 and at least once again between July 1 and December 31, with a minimum period of 120 days between tests.
Source: USDA's AMS
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