§228b Prompt Payment for Purchase of Livestock

Summary

Buyers of livestock must pay the seller the full purchase price by the close of the next business day after they buy the animals and take possession. For animals bought for slaughter, the buyer must give a check at the point of transfer or send the money by wire, electronic funds transfer, or another fast method the Secretary approves by the close of the next business day. For purchases on a carcass or “grade and yield” basis, payment by check at transfer or by fast transfer must occur no later than the close of the first business day after the price is determined. If the seller is not there, the buyer must wire the funds or mail a check within those time limits; that counts as timely payment. Buyers and sellers can agree in writing before a sale to different payment terms if the Secretary allows it. Any such written agreement must be kept in the seller’s and buyer’s records and shown on the buyer’s transaction papers. Any delay or attempt to delay payment to stretch out the normal payment time is an unfair practice and is prohibited.