United States Department of Agriculture

Agricultural Marketing Service

Prompt Payment 

for Livestock 

Purchases

Packers, market agencies, and dealers (collectively 

“buyers”) subject to the Packers and Stockyards Act 

(P&S Act) must pay promptly for all the livestock 

they purchase. It does not matter whether the buyer 

purchases the livestock directly from an owner, an 

auction market, a stockyard, another dealer, or market 

agency. Payment requirements still apply.

Under the P&S Act, a buyer must deliver full payment 

(e.g. a check) to the seller, or an authorized representative, at the place where livestock possession is 

transferred by the payment due date. If the seller or 

authorized representative is not present to receive full 

payment where livestock possession is transferred, the 

buyer may, by the payment due date, transfer funds to 

the seller’s account by wire, electronic funds transfer, or 

any other expeditious method determined appropriate 

by the Packers and Stockyards Division (PSD), or pay 

by check. A buyer may also pay by mail if the seller 

expressly agrees in writing to accept mail payment prior 

to the transaction. Any full payment delivered by mail 

must be for the agreed upon purchase price, and sealed 

in a properly addressed envelope to the seller with 

prepaid first class postage. The envelope must be postmarked by the payment due date.

When is Payment 

Due? 

Under the P&S Act, buyers must 

pay for livestock purchased 

for slaughter on a carcass, or 

“grade and yield” basis before 

the close of the business day 

following the determination 

of the purchase price. Buyers 

must pay for all other livestock 

purchases before the close of 

the next business day following 

the purchase and transfer of 

possession of the livestock. 

Any delay or attempt to delay 

payment by a buyer is considered an “unfair practice” under 

the P&S Act. Therefore, buyers 

must issue, date, and deliver 

payment instruments by the 

payment due date. Buyers must 

also check the collection times 

of any mailbox they use to mail 

livestock payments, and ensure 

the scheduled collection of the 

mail is prior to the payment due 

date.

Agreements to 

Different Payment 

Terms

The buyer and seller may agree 

to payment terms other than 

those required by the P&S Act. 

Any such agreement must be 

made prior to the purchase 

transaction and must be in writing. Both parties must include 

the agreement in their records, 

and any accounts or documents 

issued relating to the purchase 

transaction.

Under the P&S Act, the U.S. 

Congress established a statutory livestock trust to protect 

the cash sellers of livestock 

from inadequate financing 

arrangements by certain packers 

(those whose average annual 

purchases exceed $500,000): 

A cash sale is one in which the 

seller does not expressly extend 

credit to the buyer. Therefore, a 

seller extending credit on the 

www.ams.usda.gov Continued on back
Agricultural Marketing Service Prompt Livestock Payment

sale of livestock for slaughter to 

a packer forfeits his/her rights to 

the trust.

Furthermore, before purchasing 

livestock on credit, a buyer (a 

packer subject to the trust) must 

obtain a written acknowledgment from the seller expressly 

waiving his/her (the seller’s) 

trust rights. The buyer must also 

retain the signed acknowledgement, together with all other 

documents, if any, and provide 

a copy to the seller. This agreement sets forth the terms of the 

credit sale.

Similarly, before a buyer may 

issue a bank draft (other than a 

check) as payment for livestock, 

the seller must expressly agree 

in writing that payment may 

be made by a draft. If the bank 

draft is issued as payment for 

livestock purchased for slaughter, the buyer must also obtain 

a written acknowledgment from 

the seller waiving his/her trust 

rights.

Other Applicable 

Payment 

Requirements 

Buyers cannot intimidate or 

threaten the livestock seller to 

influence the terms of payment. 

Demanding 

Immediate Payment

The P&S Act does not prevent 

livestock sellers from requiring 

immediate payment. Market 

agencies selling livestock on 

commission at auction markets 

and stockyards may refuse to 

sell to a potential buyer. They 

may also require cash payment 

prior to releasing the livestock. 

Failure to Pay for 

Livestock 

To report a buyer has not 

promptly paid you for a livestock 

transaction, contact us at the 

regional office for your state.

PSD Eastern Regional Office 

75 Ted Turner Dr., Suite 230 

Atlanta, GA 30303 

Phone: 404-562-5840 

Fax: 404-562-5848

Email: PSDAtlantaGA@ams.

usda.gov

Region includes: Alabama, 

Arkansas, Connecticut, Delaware, 

District of Columbia, Florida, 

Georgia, Louisiana, Maine, 

Maryland, Massachusetts, 

Mississippi, New Hampshire, 

New Jersey, New York, North 

Carolina, Pennsylvania, 

Rhode Island, South Carolina, 

Tennessee, Vermont, Virginia, 

West Virginia, and U.S. Territories, 

including Puerto Rico. 

PSD Midwestern Regional 

Office 

210 Walnut Street, Suite 317 

Des Moines, IA 50309 

Phone: 515-323-2579 

Fax: 515-323-2590

Email: PSDDesMoinesIA@ams.

usda.gov 

Region includes: Illinois, Indiana, 

Iowa, Kentucky, Michigan, 

Minnesota, Missouri, Nebraska, 

North Dakota, Ohio, South 

Dakota, and Wisconsin. 

PSD Western Regional Office 

3950 Lewiston, Suite 200 

Aurora, CO 80011 

Phone: 303-375-4240 

Fax: 303-371-4609

Email: PSDDenverCO@ams.

usda.gov

Region includes: Alaska, Arizona, 

California, Colorado, Hawaii, 

Idaho, Kansas, Montana, Nevada, 

New Mexico, Oklahoma, Oregon, 

Texas, Utah, Washington, and 

Wyoming. 

Please direct comments 

or questions about this 

publication to: 

USDA Agricultural Marketing 

Service

Fair Trade Practices Program

Packers and Stockyards Division 

1400 Independence Avenue S.W.

Washington DC 20250-3601 

Phone: 202-720-7051

Fax: 202-205-9237

Email: PSDWashingtonDC@ams.

usda.gov 

Toll-Free HOTLINE: 

1-833-DIAL PSD 

(1-833-342-5773)

This publication does not create 

or confer any rights for or on 

any person. Nor does it operate 

to bind the public. You can 

use an alternative approach, 

if the approach satisfies the 

requirements of the P&S Act 

and regulations. See 7 U.S.C. 

228b and 9 CFR 201.43, 201.99, 

and 201.200, which relate to 

the content in this publication. 

You may also want to see 9 CFR 

203.16.

USDA is an equal opportunity provider, 

March 2018 www.ams.usda.gov employer, and lender.