The U.S. Department of Agriculture entered into a stipulation agreement with Texas-based Mid-Tex Livestock Auction LLC on Nov. 7, 2023, for alleged violations of the Packers and Stockyards (P&S) Act. Under the terms of the stipulation, Mid-Tex waived its rights to a hearing and paid a penalty of $3,750.

An investigation by USDA’s Agricultural Marketing Service revealed that Mid-Tex had custodial account shortages on July 12 and Aug. 15, 2022, of $168,086 and $144,201, respectively. The custodial shortages were partly due to the market failing to reimburse the custodial account by the close of the seventh day following the sale.

A custodial account is a trust account designated for shippers’ proceeds from the sale of livestock in trust for sellers. Failure to reimburse the custodial account timely is a violation of the Packers & Stockyards Act and regulations.

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.

Source: USDA's AMS