Public Affairs
WASHINGTON, Aug. 23, 2021 – The U.S. Department of Agriculture (USDA) entered into a stipulation agreement with 36 Hwy Sale Barn LLC, doing business as Osborn Livestock Auction (Hwy 36), on July 15, 2021, for alleged violations of the Packers and Stockyards (P&S) Act. Under the terms of the stipulation agreement, Hwy 36 waived their rights to a hearing and paid a civil penalty of $1,500.
An investigation by USDA’s Agricultural Marketing Service (AMS) found that Hwy 36 failed to maintain their custodial account, resulting in custodial shortages of $113,905 as of April 30, 2020, and a custodial shortage totaling $175,017 as of May 31, 2020.
A custodial account is a trust account designated for shippers’ proceeds from the sale of livestock in trust for sellers. The custodial shortages resulted from the failure of 36 Hwy to reimburse the custodial account timely. Custodial misuse occurred when 36 Hwy allowed bank fees to be paid using custodial account funds. Custodial misuse is considered a deceptive trade practice and violates Section 312 (a) of the Act and Section 201.42 (d) of the regulations.
The P&S Act authorizes the Secretary of Agriculture to assess civil penalties up to $29,270 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 (202) 720-7051, or by email at Stuart.Frank@usda.gov.
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