Poultry Producers Financial Protection Act of 1987
PL 100-173 (H.R.3457), enacted 11/23/1987

PUBLIC LAW 100-173—NOV. 23, 1987 
101 STAT. 917 
Public Law 100-173 
100th Congress 
An Act 
To amend the Packers and Stockyards Act, 1921, to provide financial protection to 
poultry growers and sellers, and to clarify Federal jurisdiction under such Act. 
Be it enacted by the Senate and House of Representatives of the 
Ainited States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the "Poultry Producers Financial Protec-
tion Act of 1987". 
SEC. 2. DEFINITIONS. 
Section 2(a) of the Packers and Stockyards Act, 1921 (7 U.S.C. 182), 
is amended— 
(1) in paragraph (5) by striking "and" at the end; 
(2) by redesignating paragraph (6) as paragraph (11); and 
(8) by inserting after paragraph (5) the following: 
"(6) The term 'poultry' means chickens, turkeys, ducks, geese, and 
other domestic fowl; 
"(7) The term 'poultry product' means any product or byproduct of 
the business of slaughtering poultry and processing poultry after 
slaughter; 
"(8) The term 'poultry grower' means any person engaged in the 
business of raising and caring for live poultry for slaughter by 
another, whether the poultry is owned by such person or by another, 
but not an employee of the owner of such poultry; 
"(9) The term poultry growing arrangement' means any growout 
contract, marketing agreement, or other arrangement under which 
a poultry grower raises and cares for live poultry for delivery, in 
accord with another's instructions, for slaughter; 
"(10) The term 'live poultry dealer' means any person engaged in 
the business of obtaining live poultry by purchase or under a poultry 
growing arrangement for the purpose of either slaughtering it or 
selling it for slaughter by another, if poultry is obtained by such 
person in commerce, or if poultry obtained by such person is sold or 
shipped in commerce, or if poultry products from poultry obtained 
by such person are sold or shipped in commerce; and". 
SEC. 3. UNLAWFUL PRACTICES. 
Section 202 of the Packers and Stockyards Act, 1921 (7 U.S.C. 192), 
is amended— 
(1) by striking "It shall be unlawful with respect to livestock, 
meats, meat food products, livestock products in unmanufac-
tured form, poultry or poultry products for any packer or any 
live poultry dealer or handler to:" and inserting "It shall be 
unlawful for any packer with respect to livestock, meats, meat 
food products, or livestock products in unmanufactured form, or 
for any live poultry dealer with respect to live poultry, to:"; and 
(2) in subdivision (c) by striking 'Sell or otherwise transfer to 
or for any other packer or any live poultry dealer or handler, or 
Nov. 23, 1987 
[H.R. 3457] 
Poultry 
Producers 
Financial 
Protection 
Act of 1987. 
7 u s e 181 note. 
101 STAT. 918 
PUBLIC LAW 100-173—NOV. 23, 1987 
buy or otherwise receive from or for any other packer or any 
live poultry dealer or handler, any article for the purpose or 
with the effect of apportioning the supply between any such 
packers," and inserting "Sell or otherwise transfer to or for any 
other packer or any live poultry dealer, or buy or otherwise 
receive from or for any other packer or any live poultry dealer. 
^ ' ' 
any article for the purpose or with the effect of apportioning the 
supply between any such persons,". 
' 
SEC. 
4
. 
STATUTORY 
TRUST 
ESTABLISHED. 
: 
. 
i 
The Packers and Stockyards Act, 1921 (7 U.S.C. 181 et seq.), is 
amended by inserting after section 206 the following: 
7 use 197. 
"SEC. 207. (a) It is hereby found that a burden on and obstruction 
to commerce in poultry is caused by financing arrangements under 
which live poultry dealers encumber, give lenders security interest 
in, or place liens on, poultry obtained by such persons by purchase 
in cash sales or by poultry growing arrangements, or on inventories 
of or receivables or proceeds from such poultry or poultry products 
therefrom, when payment is not made for the poultry and that such 
financing arrangements are contrary to the public interest. This 
section is intended to remedy such burden on and obstruction to 
commerce in poultry and protect the public interest. 
"(b) All poultry obtained by a live poultry dealer, by purchase in 
cash sales or by poultry growing arrangement, and all inventories 
of, or receivables or proceeds from such poultry or poultry products 
derived therefrom, shall be held by such live poultry dealer in trust 
for the benefit of all unpaid cash sellers or poultry growers of such 
poultry, until full payment has been received by such unpaid cash 
sellers or poultry growers, unless such live poultry dealer does not 
have average annual sales of live poultry, or average annual value 
of live poultry obtained by purchase or by poultry growing arrange-
ment, in excess of $100,000. 
"(c) Payment shall not be considered lo have been made if the 
cash seller or poultry grower receives a payment instrument which 
is dishonored. 
"(d) The unpaid cash seller or poultry grower shall lose the benefit 
of such trust if, in the event that a payment instrument has not 
been received, within 30 days of the final date for making payment 
under section 410, or within 15 business days after the seller or 
poultry grower has received notice that the payment instrument 
promptly presented for payment has been dishonored, the seller or 
poultry grower has not preserved his trust under this section. The 
trust shall be preserved by giving written notice to the live poultry 
dealer and by filing such notice with the Secretary. 
"(e) For the purpose of this section, a cash sale means a sale in 
which the seller does not expressly extend credit to the buyer.". 
SEC. 5. LIABILITY AND ENFORCEMENT, 
Section 308(a) of the Packers and Stockyards Act, 1921 (7 U.S.C. 
209(a)), is amended by inserting "the purchase or sale of poultry, or 
relating to any poultry growing arrangement," after "livestock,". 
SEC. 6. RECORDS AND RESPONSIBILITY. 
Sections 401 and 403 of the Packers and Stockyards Act, 1921 (7 
U.S.C. 221, 223), are each amended by striking, "or any live poultry 
dealer or handler," each place it appears and inserting ", any live 
poultry dealer,". 
PUBLIC LAW 100-173—NOV. 23, 1987 
101 STAT. 919 
SEC. 7. POWERS OF FEDERAL TRADE COMMISSION AND SECRETARY OF 
AGRICULTURE. 
Section 406 of the Packers and Stockyards Act, 1921 (7 U.S.C. 227), 
is amended— 
(1) in subsection (h)— 
(A) in the first sentence of paragraph (2)— 
, 
(i) by striking "or poultry products"; and 
- ' 
(ii) by inserting "or" before "livestock products in 
unmanufactured form."; and 
(B) by amending paragraph (3) to read as follows: 
"(3) Over all transactions in commerce in margarine, oleo- Margarine. 
margarine, or poultry products and over retail sales of meat, meat Meat. 
food products and livestock products in unmanufactured form."; 
(2) by amending subsection (d) to read as follows: 
"(d) The Secretary of Agriculture shall exercise power or jurisdic-
tion over oleomargarine or retail sales of meat, meat food products, 
or livestock products in unmanufactured form only when he deter-
mines, in any investigation of, or any proceeding for the prevention 
of, an alleged violation of this Act, that such action is necessary to 
avoid impairment of his power or jurisdiction over acts or trans-
actions involving livestock, meat, meat food products, livestock prod-
ucts in unmanufactured form, or poultry other than retail sales 
thereof. In order to avoid unnecessary duplication of effort by the 
Government and burdens upon the industry, the Secretary shall 
notify the Federal Trade Commission of such determination, the 
reasons therefor, and the acts or transactions involved, and shall not 
exercise power or jurisdiction with respect to acts or transactions 
involving oleomargarine or retail sales of meat, meat food products, 
or livestock products in unmanufactured form if the Commission 
within 10 days from the date of receipt of such notice notifies the 
Secretary that there is pending in the Commission an investigation 
of, or proceeding for the prevention of, an alleged violation of any 
Act administered by the Commission involving the same subject 
matter."; 
(3) by redesignating subsection (e) as subsection (f); 
(4) by inserting after subsection (d) the following: 
"(e) The Secretary of Agriculture shall exercise jurisdiction over 
poultry products only in a proceeding brought under section 207 or 
section 410 when such action is necessary to avoid impairment of his 
jurisdiction."; and 
(5) in subsection (f), as so redesignated, by striking "and (d)" 
and inserting ", (d), and (e)". 
SEC. 8. AUTHORITY OF SECRETARY TO REQUEST INJUNCTIVE RELIEF. 
Section 408 of the Packers and Stockyards Act, 1921 (7 U.S.C. 
228a), is amended by inserting after "unmanufactured form," the 
following: "or live poultry, or has failed to pay any poultry grower 
what is due on account of poultry obtained under a poultry growing 
arrangement,". 
SEC. 
9
. 
PROMPT 
PAYMENT 
FOR 
PURCHASE 
OF 
POULTRY. 
The Packers and Stockyards Act, 1921 (7 U.S.C. 181 et seq.), is 
amended— 
(1) by redesignating sections 410 and 411 as sections 414 and 7 USC 228c, 229. 
415, respectively; and 
(2) by inserting after section 409 the following: 
101 STAT. 920 
PUBLIC LAW 100-173—NOV. 23, 1987 
•h 
.M' 
7 use 228b-l. 
"SEC. 410. (a) Each live poultry dealer obtaining live poultry by 
purchase in a cash sale shall, before the close of the next business 
day following the purchase of poultry, and each live poultry dealer 
obtaining live poultry under a poultry growing arrangement shall, 
before the close of the fifteenth day following the week in which the 
poultry is slaughtered, deliver, to the cash seller or poultry grower 
from whom such live poultry dealer obtains the poultry, the full 
amount due to such cash seller or poultry grower on account of such 
poultry. 
"(b) Any delay or attempt to delay, by a live poultry dealer which 
is a party to any such transaction, the collection of funds as herein 
provided, or otherwise for the purpose of or resulting in extending 
the normal period of payment for poultry obtained by poultry 
growing arrangement or purchased in a cash sale, shall be consid-
ered an 'unfair practice' in violation of this Act. Nothing in this 
section shall be deemed to limit the meaning of the term 'unfair 
practice' as used in this Act. 
"(c) For the purpose of this section, a cash sale means a sale in 
which the seller does not expressly extend credit to the buyer. 
7 use 228b-2. 
"SEC. 411. (a) Whenever the Secretary has reason to believe that 
any live poultry dealer has violated or is violating any provision of 
section 207 or section 410 of this Act, he shall cause a complaint in 
writing to be served upon the live poultry dealer, stating his charges 
in that respect, and requiring the live poultry dealer to attend and 
testify at a hearing at a time and place designated therein, at least 
30 days after the service of such complaint; and at such time and 
place there shall be afforded the live poultry dealer a reasonable 
opportunity to be informed as to the evidence introduced against 
him (including the right of cross-examination), and to be heard in 
person or by counsel and through witnesses, under such regulations 
as the Secretary may prescribe. Any person for good cause shown 
may, on application, be allowed by the Secretary to intervene in 
such proceeding, and appear in person or by counsel. At any time 
prior to the close of the hearing, the Secretary may amend the 
complaint; but in case of any amendment adding new charges, the 
hearing shall, on the request of the live poultry dealer, be adjourned 
for a period not exceeding 15 days. 
Reports. 
"(\>) If, after such hearing, the Secretary finds that the live poultry 
dealer has violated, or is violating, any provisions of section 207 or 
section 410 of this Act covered by the charges, he shall make a 
report in writing in which he shall state his findings as to the facts, 
and shall issue and cause to be served on the live poultry dealer an 
order requiring such live poultry dealer to cease and desist from 
continuing such violation. 'The testimony taken at the hearing shall 
be reduced to writing and filed in the records of the Department of 
Agriculture. The Secretary may also assess a civil penalty of not 
more than $20,000 for each such violation. In determining the 
amount of the civil penalty to be assessed under this section, the 
Secretary shall consider the gravity of the offense, the size of the 
business involved, and the effect of the penalty on the person's 
ability to continue in business: Provided, however, That in no event 
can the penalty assessed by the Secretary take priority over or 
impede the ability of the live poultry dealer to pay any unpaid cash 
seller or poultry grower. If, after the lapse of the period allowed for 
•ML ,^i^ 3^1] ? appeal or after the affirmance of such penalty, the person against 
whom the civil penalty is assessed fails to pay such penalty, the 
Secretary may refer the matter to the Attorney General, who may 
PUBLIC LAW 100-173—NOV. 23, 1987 
101 STAT. 921 
recover such penalty by an action in the appropriate District Court 
of the United States. 
"(c) Until the record in such hearing has been filed in a court of 
appeals of the United States, as provided in section 412, the Sec-
retary, at any time, upon such notice and in such manner as he 
deems proper, but only after reasonable opportunity to the live 
poultry dealer to be heard, may amend or set aside the report or 
order, in whole or in part. 
"(d) Complaints, orders, and other processes of the Secretary 
under this section may be served in the same manner as provided in 
section 5 of the Act entitled 'An Act to create a Federal Trade 
f
^
-
<
i
i 
,;'j ? 
Commission, to define its powers and duties, and for other purposes', 
approved September 26,1914. 
"SEC. 412. (a) An order made under section 411 shall be final and 7 USC 228b-3. 
conclusive unless within 30 days after service the live poultry dealer 
appeals to the court of appeals for the circuit in which he has his 
principal place of business, by filing with the clerk of such court a 
written petition praying that the Secretary's order be set aside or 
modified in the manner stated in the petition, together with a bond 
in such sum as the court may determine, conditioned that such live 
poultry dealer will pay the costs of the proceedings if the court so 
directs. 
"(b) The clerk of the court shall immediately cause a copy of the 
petition to be delivered to the Secretary, and the Secretary shall 
thereupon file in the court the record in such proceedings, as 
provided in section 2112 of title 28, United States Code. If before 
such record is filed the Secretary amends or sets aside his report or 
order, in whole or in part, the petitioner may amend the petition 
within such time as the court may determine, on notice to the 
Secretary. 
"(c) At any time after such petition is filed, the court, on applica-
tion of the Secretary, may issue a temporary injunction, restraining, 
to the extent it deems proper, the live poultry dealer and his 
-^ .gy v 
officers, directors, eigents, and employees, from violating any of the 
provisions of the order pending the final determination of the 
appeal. 
"(d) The evidence so taken or admitted, and filed £is aforesaid as a 
part of the record, shall be considered by the court as the evidence 
in the case. The proceedings in such cases in the court of appeals 
shall be made a preferred cause and shall be expedited in every way. 
"(e) The court may affirm, modify, or set aside the order of the 
Secretary. 
"(f) If the court determines that the just and proper disposition of 
the case requires the taking of additional evidence, the court shall 
order the hearing to be reopened for the taking of such evidence, in 
such manner and upon such terms and conditions as the court may 
deem proper. The Secretary may modify his findings as to the facts, 
or make new findings, by re£ison of the additional evidence so taken, 
and he shall file such modified or new findings and his recommenda-
tions, if any, for the modification or setting aside of his order, with 
the return of such additional evidence. 
"(g) If the court of appeals affirms or modifies the order of the 
Secretary, its decree shall operate as an injunction to restrain the 
live poultry dealer, and his officers, directors, agents, and employees 
from violating the provisions of such order or such order as 
modified. 
101 STAT. 922 
PUBLIC LAW 100-173—NOV. 23, 1987 
"(h) The court of appeals shall have jurisdiction which upon the 
filing of the record with it shall be exclusive, to review, and to 
affirm, set aside, or modify, such orders of the Secretary, and the 
decree of such court shall be final except that it shall be subject to 
review by the Supreme Court of the United States upon certiorari, 
as provided in section 1254 of title 28, United States Code, if such 
writ is duly applied for within 60 days after entry of the decree. The 
issue of such writ shall not operate as a stay of the decree of the 
court of appeals, insofar as such decree operates as an injunction, 
unless so ordered by the Supreme Court. 
7 use 228b-4. 
"SEC. 413. Any live poultry dealer, or any officer, director, agent, 
or employee of a live poultry dealer, who fails to obey any order of 
the Secretary issued under the provisions of section 411, or such 
i; : 
order as modified— 
"(1) after the expiration of the time allowed for filing a 
petition in the court of appeals to set aside or modify such order, 
if no such petition has been filed within such time; 
"(2) after the expiration of the time allowed for applying for a 
writ of certiorari, if such order, or such order as modified, has 
been sustained by the court of appeals and no such writ has 
been applied for within such time; or 
"(3) after such order, or such order as modified, has been 
' 
sustained by the courts as provided in section 412; 
shall on conviction be fined not less than $1,000 nor more than 
$20,000. Each day during which such failure continues shall be 
deemed a separate offense.". 
SEC. 10. REPEALER. 
Title V of the Packers and Stockyards Act, 1921 (7 U.S.C. 218-
218d), is repealed. 
SEC. 11. CONSTRUCTION. 
7 use 227 note. 
(a) GENERAL RuLE.—The amendments made by this Act to the 
Packers and Stockyards Act, 1921, shall not be construed to limit or 
otherwise affect the power or jurisdiction of the Federal Trade 
Commission under the Federal Trade Commission Act to prevent 
the use of— 
(1) unfair methods of competition in or affecting commerce, 
and 
(2) unfair and deceptive acts or practices in or affecting 
commerce, 
involving poultry products. 
PUBLIC LAW 100-173—NOV. 23, 1987 
101 STAT. 923 
(b) SECRETARY'S AUTHORITY.—Subsection (a) shall not be construed 
to limit or otherwise affect the authority of the Secretary of Agri-
culture under section 406(e), as amended, of the Packers and Stock-
yards Act, 1921. 
SEC. 12. EFFECTIVE DATE. 
This Act and the amendments made by this Act shall take effect 7 use 1
8
2 note. 
90 days after the date of the enactment of this Act. 
Approved November 23, 1987. 
lUUlu-
LEGISLATIVE HISTORY—H.R. 3457: 
HOUSE REPORTS: No. 100-397 (Comm. on Agriculture). 
CONGRESSIONAL RECORD, Vol. 133 (1987): 
Oct. 27, considered and passed House. 
Nov. 3, considered and passed Senate.