PSD ensures payment protection for livestock and poultry sellers by pursuing an aggressive program to maintain standards of financial stability for those engaged in the marketing of livestock, meat, and poultry. Specific protections include:
Prompt Payment
Market agencies, dealers, and packers are required to pay promptly for livestock, usually by the close of business on the day after transfer of possession. For livestock sold on a grade-and-yield basis, payment is due by the end of the next business day after the final purchase price is determined.
Live poultry obtained under a poultry growing arrangement must be paid for by the close of the 15th day following the week in which the poultry is slaughtered.
Solvency
Market agencies, and dealers must maintain a solvent financial condition to remain in business. The Secretary of Agriculture may, after notice and hearing, issue an order suspending insolvent market agencies and stockyard owners for a reasonable specified period. If the Secretary finds any packer is insolvent, she/he may, after notice and hearing, issue an order requiring the packer to cease and desist from purchasing livestock while insolvent.
Bonds
Market agencies and dealers must maintain a bond as a measure of protection for livestock sellers against non-payment. The size of the bond is based on the volume of business, generally an average 2 days' business with a minimum of $10,000 bond. Packers whose annual livestock purchases exceed $500,000 are also required to be bonded.
- Market agencies, dealers, and packers that currently maintain bonds securing the performance of their obligations under the Packers and Stockyards Act.
- How to File a Bond Claim (pdf)
Custodial (Trust) Accounts
Market agencies selling livestock on commission must maintain a separate bank account for custodial funds named a "Custodial Account for Shippers' Proceeds". The commission firm or auction market acts as a fiduciary depositor to the account, and the funds in the account are trust funds for the benefit of livestock sellers or consignors ("shippers"). Custodial accounts must be maintained in FDIC-insured banks to protect each seller the commission firm or auction market owes for livestock up to $250,000, in the event that the bank fails before the commission firm or auction market can issue payment.
Packer and Poultry Trusts
In the event of a failure to pay for livestock or poultry, packers and live poultry dealers are required to hold assets -- inventories, proceeds, and proceeds receivable -- in trust for the benefit of cash sellers and poultry growers.
NOTE: The lists and packer bond amounts are current on the date listed on the linked file. The listed business addresses are most often mailing addresses. Please contact a Packers and Stockyards Division regional office with any questions concerning these lists.