The following are some basic responsibilities for packers. Please refer to the Packers and Stockyards Act, 1921, as Amended and Supplemented, and the Regulations issued thereunder, for a complete list of legal responsibilities.

Bonds. Every packer whose annual livestock purchases equal or exceed $500,000 shall execute and maintain a reasonable bond, as a measure of protection for livestock sellers. Packers must file a clause 4 bond or bond equivalent. The size of the bond is based on the volume of business, generally an average of two days business with a minimum bond of $10,000. Packers whose annual livestock purchases are below $500,000 are not required to be bonded.

Prompt Payment. Each packer purchasing livestock shall, before the close of the next business day following the purchase of livestock and transfer of possession thereof, deliver to the seller the full amount of the purchase price. In the case of a purchase on a carcass or "grade-and-yield" basis, payment must be made not later that the close of the first business day following determination of the purchase price. The parties to a transaction may agree in writing prior to the transaction to effect payment in a manner other than previously described. When a packer enters into such an agreement, the agreement must also include a trust waiver, informing the seller that extending credit to a packer will cause the seller to lose all rights under the Trust Provisions.

Scales. All livestock scales subject to the P&S Act must be tested for accuracy by a competent agency at least each six months. The certification form must be filed with the regional P&SP office. Any scale known to be inaccurate may not be used.

Weighing. Only competent, trained weigh masters should weigh livestock. All weigh masters must read and sign an Acknowledgment Form certifying that they have read the Instructions for Weighing Livestock or Poultry. The weighmaster should ensure that the scale will provide accurate weights prior to weighing. The weigh master should keep the scale balanced at zero at all times; check the zero balance every 15 minutes or 15 drafts, and after every draft of more than half the scale capacity; record the time of zero balance check; and weigh each draft of livestock to the nearest scale division. The weighmaster should favor neither the buyer nor the seller; print a scale ticket only while livestock is on scale and scale has settled; complete the scale ticket; allow persons having a legitimate interest in a draft of livestock to observe the weighing; and reweigh a draft of livestock immediately if requested.

Packer Trusts. If a packer fails to pay for livestock, the receivables, inventories, and proceeds derived from such purchases in cash sales become trust assets by operation of law. The packer must hold these assets for the benefit of all unpaid cash sellers. Cash sellers are legally in priority payment position in bankruptcy or in claims against trust assets in the event of a business failure. Refer to the prompt payment section; any seller that extends credit to a packer will lose all rights under the Trust Provisions.

Unfair Practices. It shall be unlawful for any packer to engage in or use any unfair, unjustly discriminatory, or deceptive practice or device.

Records. Every packer shall keep such accounts, records, and memoranda as fully and correctly disclose all transactions involved in his/her business, including the true ownership of such business. The records must by maintained for two full years, or longer if instructed by the Administrator.

Annual Reports. Every packer shall file an annual report with P&SP. A packer will complete form P&SP-3000 - Annual Report for Packers.

Inspection of Business Records and Facilities. Each packer, upon proper request, shall permit authorized representatives of the Secretary of Agriculture to enter its place of business during normal business hours and to examine records pertaining to its business subject to the Act.

Last updated 06/13/06