Release No.: 009-19
WASHINGTON, Feb. 7, 2019 – On Dec. 20, 2018, Beltex Corporation, doing business as Frontier Meats (Beltex), a packer in Fort Worth, Texas, waived its right to a hearing, entered into a stipulation agreement with the U.S. Department of Agriculture (USDA) and paid a penalty of $8,400 for alleged violations of the Packers and Stockyards (P&S) Act.
The USDA Agricultural Marketing Service’s (AMS) investigation of Beltex revealed that it failed to timely pay for 282 head of livestock, totaling $430,407. Payment for 13 purchases from April to June 2017 ranged from four to 49 days late. Beltex claimed it had verbal credit agreements with livestock sellers. However, failure to timely pay for livestock is an unfair practice in violation of Section 409 of the P&S Act, even if livestock sellers have verbal agreements for delayed payments.
Parties who wish to agree to payment later than required in Section 409(a) of the P&S Act must expressly agree to different payment terms, in writing, before such purchase or sale. The written credit agreement required in Section 409(b) of the P&S Act is an important safeguard. Livestock sellers who extend credit to a buyer risk not receiving payment at all. Also, livestock sellers who extend credit to a packer, whose average annual purchases exceed $500,000, lose the benefit of the statutory livestock trust in Section 206 of the P&S Act.
The P&S Act authorizes the Secretary of Agriculture to assess civil penalties up to of $11,000 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 entering 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 P&S Act, contact Stuart Frank, Fair Trade Practices Program, Packers and Stockyards Division, at (515) 323-2586, or by email at firstname.lastname@example.org.
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