§228b Prompt Payment for Purchase of Livestock

Summary

Buyers who are packers, market agencies, or dealers must pay the seller the full price by the close of the next business day after they buy the livestock and take possession. If the buyer is purchasing livestock for slaughter, they must give payment at the point where possession changes, either by a check or by wire, electronic funds transfer, or another fast method the Secretary approves. For purchases based on carcass or “grade and yield,” payment must be by check at transfer or sent by wire, electronic funds transfer, or another fast method approved by the Secretary no later than the close of the first business day after the price is determined. If the seller or their authorized representative is not there, the buyer must send funds by an approved fast method or mail a properly addressed check within those time limits; that counts as following the rule. The buyer and seller may sign a written agreement before the sale to use a different payment method, subject to any terms the Secretary sets. Any such agreement must be kept in the market agency’s or dealer’s records and in the purchaser’s records and documents. Any delay or attempt to delay payment by a market agency, dealer, or packer to extend normal payment times is an unfair practice and violates the law; this does not limit other meanings of “unfair practice” in the chapter.