A Look at the Packers and Stockyards Act

By Jason Bottlinger on August 10, 2017

The Packers and Stockyards Act is designed to promote the interests of consumers as well as farmers and ranchers in healthy competition. It regulates the meatpacking industry and governs the practices by which the livestock and poultry industries operate.

The Act was passed in response to small farmers finding it impossible to break into the industry, which is largely run by a handful of major meat producers and providers.

What Activities Does the Act Cover?

Essentially, the Packers and Stockyards Act governs two specific areas of operation. One is competitive business practices, and the other is financial management.

“Competitive business practices” refers to unjust, unfair, or fraudulent business operations run by anyone in the livestock, meat, or poultry industries. This means there can be no favoritism, hidden agreements, or other questionable behavior.

With respect to “financial management,” anyone with annual purchases of over $500,000 in livestock is required to be bonded. Trust provisions are now enacted to ensure meat packers pay their obligations.

What Penalties Exist for Noncompliance?

If someone subject to the Act fails to comply with it, the government has a host of enforcement opportunities:

• Civil penalties of up to $11,000 per incident for anyone in the meat, livestock, or swine industries; and up to $27,000 for anyone in poultry.
• Official notices or warnings, which may allow the offender to remedy any violations without the need for further legal proceedings.
• Stipulation agreements, when violations are found and fines are assessed, but formal action is not pursued. The right to a formal hearing is waived in a settled agreement.
• Legal action. This can range from an administrative action to a court trial with the possibility of everything from criminal penalties to cessation of business.

Because the risks are so great, anyone involved with the meat or poultry-packing industry needs an experienced legal team to turn to when questions arise. Reach out to an Omaha agricultural lawyer at Bottlinger Law L.L.C. at (402) 505-8234 for advice and counsel.