Livestock Sellers' Rights Under the Statutory Trust for Livestock
Do i have a potential claim under the Statutory Trust?
- Did a packer fail to pay you?
- Does the packer owe you for livestock?
- Was your transaction a cash sale?
If you answered “no” to any of these questions, you do not have a potential claim.
Review Frequently Asked Questions for clarification related to these three questions.
If you answered “yes” to all three questions above, you may have a potential claim. Review the questions below for some other factors that may affect your claim.
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- Within thirty (30) calendar days after the final date for making a payment under Section 409 (also known as 7 U.S.C. §228b) of the Packers and Stockyards Act, or
- Within fifteen (15) business days after you receive notice that the bank dishonored the packer’s payment instrument (such as a check), which you promptly presented for payment
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How do I file my trust claim?
- Give written notice to the packer and us. Contact us at our regional office that covers your State.
- Request written confirmation of receipt for both notices. Keep copies of the notice and receipts to show that you timely filed your claim.
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What should I include in my trust claim?
- Packer’s name and contact information
- Your name and contact information
- Date of any livestock transaction(s) for which the packer owes you
- Amount the packer owes you for livestock
- Date(s) of any notice(s) you received indicating that the bank dishonored the packer’s payment instrument(s) for livestock issued to you
- Copies of relevant documents and any other information that may support the validity of your trust claim
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What must a subject packer do if I timely file a valid trust claim?
- It fully pays you and all others who timely filed valid trust claims, or
- It fully distributes proceeds from the affected assets among claimants with valid trust claims, if timely filed valid trust claims exceed the value of affected assets
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Which of the subject packer’s assets does the Statutory Trust affect?
- All livestock purchased by the packer in cash sales, and
- All inventories, receivables, and proceeds of meat, meat food products, and livestock products derived from livestock purchased by the packer in cash sales
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How does the Statutory Trust benefit me
It grants you, and all other unpaid livestock sellers who file timely and valid trust claims against a subject packer,
- Rights to the packer’s affected assets until the packer fully pays you for your livestock or it fully distributes the proceeds from those assets among claimants with valid trust claims, and
- Superior legal claim to the packer’s affected assets than the packer’s secured creditors have over those same assets.
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Where can I get additional information about the Statutory Trust?
- Review Frequently Asked Questions
- Review our Livestock Sellers Rights brochure
- Review Section 206 [7 U.S.C. §196] of the Packers and Stockyards (P&S;) Act
- Review Sections 203.15 [9 CFR §203.15] and 203.16 [9 CFR §203.16] of the Statements of Policy under the P&S; Act
- Contact us at one of our offices
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Frequently Asked Questions
Question: Are all packers subject to the Statutory Trust?
Answer: No. Only slaughtering packers operating in the United States whose average annual purchases exceed $500,000 are subject to the Statutory Trust.
Question:I do not know how much the packer purchases annually. How could I find out whether this packer is subject to the Statutory Trust?
Answer: Contact us at the regional office that covers your State.
Question: I noticed that the definition of “livestock” includes the phrase “or dead.” If I sell meat products or livestock products to a packer, could I file a valid claim under the Statutory Trust?
Answer: No, the phrase “or dead” relates to live animals that died in transit. Meat products or livestock products are not livestock. You could not file a valid claim under the Statutory Trust for the sale of those products.
Question: How have courts interpreted the phrase “expressly extend credit” in the definition of a “cash sale”?
Answer: The United States Court of Appeals for the Third Circuit discussed this issue in its April 12, 2012 opinion (Case 11-3231) in re Empire Kosher Poultry, Inc. v. United States Department of Agriculture. The Circuit Judges concluded (page 9) that “a sale . . . is a cash sale unless a seller ‘directly, firmly, and explicitly state[s]’ its intent to extend credit.”
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