Release No.: 072-18
WASHINGTON, June 13, 2018 – On May 4, 2018, Central Livestock Association, LLC, (Central Livestock), South St. Paul, Minn., waived its right to a hearing, entered into a stipulation agreement with the U.S. Department of Agriculture (USDA), and paid a penalty of $2,000 for alleged violations of the Packers and Stockyards (P&S) Act (7 U.S.C. § 181, et seq.).
An investigation by USDA, Agricultural Marketing Service (AMS) revealed Central Livestock failed to remit proceeds when due to consignors that used Central Livestock to market their cattle from August 2017 through October 2017. The date of transaction occurred on the date of slaughter or grading. Failure to timely remit consignor proceeds violated Sections 307 and 312(a) of the P&S Act.
Central Livestock comingled cattle from different consignors on individual loads. Packers provided the dressed weight and corresponding back tag number for each carcass so that Central Livestock could correctly assign carcass weights to consignors’ cattle. Investigators for the Packers and Stockyards Division found carcass weights assigned to carcasses with no back tag information on eight of Central Livestock’s packer settlements issued from August 2017 through October 2017. Central Livestock used average yields to assign weights to carcasses with missing back tags. Because the cattle were not uniform in weight, this method was not reliable. Fifty-nine head of cattle on the eight packer settlements were missing back tag information. Central Livestock assigned these 59 head to 29 consignors, resulting in these consignors receiving assumed weights resulting in possible over or under payment. Section 201.55 of the regulations issued under the P&S Act requires that when livestock is sold on a weight basis, the livestock seller be paid on the actual weight of their livestock. The use of assumed weights is a violation of section 201.55. Central Livestock’s failure to maintain the identity of each seller’s livestock, and the carcasses therefrom, violated Section 401 of the P&S Act and Section 203.4 of the regulations.
The P&S Act authorizes the Secretary of Agriculture to assess civil penalties of not more than $11,000 per count against any person who violates the statute(s) cited above, after notice and opportunity for hearing on the record.
USDA enforcement rules provide a mechanism to quickly resolve violations of the P&S 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.
For further information about the Packers and Stockyards Act, contact Brett Offutt, Fair Trade Practices Program, Packers and Stockyards Division, at (202) 720-7051, or by email at s.brett.offutt@ams.usda.gov.
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