Meat Packers - Sales and Purchase Contract Complaints

Periodically, Agricultural Marketing Service’s Packers and Stockyards Division (PSD) receives complaints concerning the failure or refusal of buyers to pay the full purchase price for, or to accept delivery of, their purchases of meat and meat food products and sellers failing to meet contractual specifications. Most such complaints arise out of disputes concerning condition, grade, weight, or shipping instructions.

PSD believes that both seller and buyer should take the following points into consideration when selling and buying meat and meat food products:

  1. Terms of shipment and time of arrival. Packers must specify terms and conditions of shipment and delivery in the contract, and both parties should understand fully all terms and conditions of the contract. Any deviation from normal practices, such as a guaranty by the shipper as to the date of arrival at destination, or any deviation from the normal meaning of terms should be included in the contract and be fully understood by both parties.
  2. Quality and condition.
    1. The seller is responsible for shipping meat and meat food products in accordance with the contract specifications
    2. When a buyer believes that the shipment does not meet the terms of the contract, the buyer should immediately contact the seller or the seller's agent and advise the seller of the nature of the complaint. This affords the seller an opportunity to (1) renegotiate the contract, (2) personally inspect the meat or meat food products, or (3) have an impartial party inspect or examine the meat or meat food products. Inspection and examination service of this type is available nationally through the USDA meat grading service and locally through various impartial persons or agencies.
    3. All transaction terms should be made clear in the contract, whether written or verbal. If there is any chance of misunderstanding, the parties should exchange a written confirmation between themselves. When the parties cannot settle a contract dispute and either party intends to file a complaint, the filing party should bring the complaint to the attention of the nearest PSD regional office as soon as possible. However, a concerted effort on the part of both buyer and seller to negotiate clear and complete contracts will greatly reduce misunderstandings that result in the filing of such complaints.

If PSD finds that any packer unjustifiably (1) refused to pay the contractual price for meat or meat food products purchased, (2) refused to accept a shipment of meat or meat food products, or (3) failed to ship meat or meat food products in accordance with the the contract specifications, we may issue a complaint charging the packer with violation of section 202 of the Packers and Stockyards Act (Act). In the formal administrative proceeding initiated by any such complaint, the Judicial Officer will determine, based on the record in the proceeding, whether the packer has violated the Act.  If so, the Judicial Officer may order the packer to cease and desist from continuing such violation.