USDA Settles a Case with Mammoth Cave Dairy Auction Inc. Resulting in a $2,750 Penalty

Tuesday, May 8, 2018 - 11:30am
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Release No.: 047-18

WASHINGTON, May 8, 2018 – On Nov. 15, 2017, Mammoth Cave Dairy Auction Inc. (Mammoth), Smiths Grove, Ky., waived its right to a hearing, entered into a stipulation agreement with the U.S. Department of Agriculture (USDA), and paid a penalty of $2,750 for an alleged violation of the Packers and Stockyards (P&S) Act.

The USDA Agricultural Marketing Service’s (AMS) investigation of Mammoth revealed custodial account shortages on May 11, 2017, of $68,274.43 and June 15, 2017, of $119,626.48.  A custodial account is a trust account that is a separate bank account designated for shippers’ proceeds.  Operating with custodial account shortages is a violation of Section 312(a) of the Packers and Stockyards Act.

The P&S Act, 1921, (7 U.S.C. § 181, et seq.) 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

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