The U.S. Department of Agriculture (USDA) entered into a stipulation agreement with Franklin County Livestock (FCL), on April 24, 2023, for alleged violations of the Packers and Stockyards (P&S) Act. Under the terms of the stipulation, FCL waived its rights to a hearing and paid a penalty of $4,750.

An investigation by USDA’s Agricultural Marketing Service (AMS) revealed that FCL had custodial account shortages on Nov. 18, 2022, and Jan. 9, 2023, of $128,460 and $276,362, respectively. Both custodial account shortages occurred because FCL failed to reimburse the custodial account timely for receivables. FCL also misused its custodial account in the amount of $1,560,256 by not reimbursing the account for bank service charges and transferring money out of the account before being reconciled.

A custodial account is a trust account designated for shippers’ proceeds from the sale of livestock in trust for sellers. Failure to reimburse the custodial account timely is a violation of the Packers & Stockyards Act and regulations.

The P&S Act authorizes the Secretary of Agriculture to assess civil penalties up to $31,459 per violation against any person after notice and opportunity for a 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 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 Packers and Stockyards Act, contact Kraig Roesch, Packers and Stockyards Division, at (303) 375-4291 or by email at kraig.roesch@usda.gov.

Original source can be found here.