United States Department of Agriculture

Agricultural Marketing Service

What is the 

Packer Trust? 

The packer trust is a statutory trust authorized in the 

Packers and Stockyards Act (P&S Act) to remedy the 

burden placed on public interests by packers’ inadequate 

financing arrangements. The trust protects certain livestock sellers by making their rights to specific assets of 

the packer legally superior to the interests of any secured 

lenders to whom the packer offered those assets as collateral for loans. 

Whose rights does the trust protect? 

Cash sellers of livestock. If you (as a producer, dealer, or market 

agency) sell livestock to a packer on a cash basis, the packer trust 

protects your rights. A cash sale is one in which you do not extend 

credit to the buyer. The packer trust will not protect you if you 

extend credit to a packer in writing, which contains a trust waiver.

The prompt payment provisions of the P&S Act permit livestock 

buyers and sellers to agree, in writing, to payment terms other than 

those set out in the P&S Act. For example, if you sell livestock to a 

packer, you may agree, in writing, to give the packer time to cover a 

check that you know is not good or to allow the packer more time 

to make payment than permitted under the P&S Act. However, by 

agreeing to these terms, you may forfeit the benefits of the packer 

trust, since a court may interpret your written agreement as an 

extension of credit rather than a cash sale. 

Read documents carefully before signing. Credit agreements have 

sometimes been included in small print on stockyard receipts, 

scale tickets, and other documents. Never sign anything you do 

not understand, or you could, unwittingly, forfeit the benefits of the 

packer trust. 

How do you preserve 

your rights? 

Notify both the packer and the 

nearest Packers and Stockyards 

Division (PSD) regional office 

that the packer has failed to pay 

you for livestock. Your claim 

must be in writing. If you do not 

give the required written notice 

to both the packer and PSD, you 

will forfeit the benefits of the 

packer trust. 

How quickly must 

you file a claim?

• Thirty (30) calendar 

days after payment was 

due. Notify the packer 

and PSD of your claim 

within 30 calendar days 

immediately following 

the day the packer owed 

you payment. If you sell 

livestock to a packer on 

a live basis, the packer 

must pay you (in person, 

by wire, or in the mail) 

by the close of the next 

business day following 

purchase and transfer of 

possession. If you sell 

livestock to a packer on 

a “grade and yield” basis, 

the packer must pay (in 

person, by wire, or in 

the mail) by the close of 

the next business day 

following determination 

of the purchase price.

• Fifteen (15) business 

days after payment 

instrument is not 

honored. Notify the 

packer and PSD of 

your claim within 15 

business days immediately following the 

day you receive notice 

from your bank that the 

payment instrument 

was not honored. If 

the packer gave you a 

payment instrument, you 

should properly present 

it for payment and 

receive notice that it is 

www.ams.usda.gov Continued on back
Agricultural Marketing Service The Livestock Packer Trust

dishonored (for example, 

a bounced check), before 

you make this claim. Do 

not delay in giving written notice of your claim, 

or you will forfeit the 

benefits of the packer 

trust.

What information 

should you include?

Include all of the following in 

your claim:

• The name and contact

information of the

packer

• Your name and contact

information

• The date of the transaction(s) in which the

packer failed to pay you

• The date you received

notice that one or

more payment instruments from the packer

were dishonored (if

applicable)

• The amount of money

the packer owes you

• Any other information

necessary to support

your trust claim

What is a packer?

Under the P&S Act, a packer is 

someone engaged in the business of 

• Buying livestock in

commerce for purposes

of slaughter,

• Manufacturing or

preparing meats or meat

food products for sale or

shipment in commerce, 

or

• Marketing meats, meat

food products, or livestock products in an

unmanufactured form, 

acting as a wholesale

broker, dealer, or distributor in commerce.

Which packers are 

subject to the trust?

Packers whose average annual 

purchases of livestock exceed 

$500,000 are subject to the 

packer trust. If you cannot 

determine if a packer is subject, 

contact the nearest PSD regional 

office for assistance. 

What assets are subject 

to the trust?

Subject assets include: 

• Livestock a packer

bought in cash sales, as

well as

• Inventories, receivables, 

and proceeds derived

from meat, meat food

products, or livestock

products.

Other assets, such as plant 

equipment and buildings, are 

not subject to the packer trust.

What can USDA do 

about packers nonpayment? 

USDA can: 

• Notify the packer of its

responsibility to hold

subject assets in trust

for the benefit of unpaid

cash sellers

• Penalize a packer for

failing to pay for livestock, since that is a

violation of the P&S Act

• Ask a court to prohibit a

packer from committing

future violations of the

P&S Act, while these

proceedings are in

progress

USDA cannot:

• Furnish you with

a lawyer to collect

payment for you

• Compel a packer to pay

you

What can courts do 

about packer nonpayment? 

A district court of the United 

States (or a bankruptcy court, 

if the packer is in bankruptcy) 

can order a packer to hold 

specific assets in trust for the 

benefit of unpaid cash sellers 

of livestock who have given the 

required notices. The court can 

only order this upon receiving a 

written complaint. As an unpaid 

cash seller of livestock, you 

may file the necessary written 

complaint with the court. 

What should you do 

after a court issues a 

trust order against a 

packer? 

As an unpaid cash seller of 

livestock, you should petition 

the court to order payment from 

the assets held in trust. You 

should file this petition even if 

you already notified the packer 

and PSD that the packer failed 

to pay you. If you do not file 

a petition with the court, the 

court may order distribution of 

the assets to other unpaid cash 

sellers who did file a petition.

Contact info for PSD regional 

offices: www.ams.usda.gov/

about-ams/programs-offices/

fair-trade-practices/packers-andstockyards-contacts

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. 

182 (a) (3) – (5), 191, 193-196, 

224, 228a and 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 203.15 and 

203.16.

 USDA is an equal opportunity provider, 

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