WASHINGTON, Aug. 5, 2020 – As part of its commitment to ensuring fair and competitive markets for the livestock, meat and poultry industries, on July 16, 2020, the U.S. Department of Agriculture (USDA) entered into a stipulation agreement with Hill City Commission, LLC (Hill City), for alleged violations of the Packers and Stockyards (P&S) Act. Under the terms of the stipulation agreement, Hill City waived its right to a hearing and paid a penalty of $1,250.
An investigation by USDA’s Agricultural Marketing Service revealed that in January and February 2020, Hill City operated with shortages in its custodial account. The shortages were the result of Hill City’s failure to reimburse its custodial account for unpaid purchases made by livestock buyers within the timeframe required under the P&S Act.
The P&S Act requires market agencies selling on commission to deposit all proceeds collected from the sale of livestock into the custodial account. Then, before the close of the seventh day following the sale of livestock, the market agency must deposit an amount equal to all the remaining proceeds receivable whether the proceeds have been collected by the market agency or not. This ensures funds will be available to cover custodial checks issued to consignors as they are presented for payment. Failure to timely reimburse the custodial account is an unfair and deceptive practice and a violation of the P&S Act.
The P&S Act authorizes the Secretary of Agriculture to assess civil penalties up to $28,061 per violation against any person after notice and opportunity for 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 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.
For further information about the Packers and Stockyards Act, contact Stuart Frank, Packers and Stockyards Division, at (515) 323-2586, or by email at stuart.frank@usda.gov.
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