C.F.R. » Title 9 » CHAPTER II—AGRICULTURAL MARKETING SERVICE (FAIR TRADE PRACTICES PROGRAM), DEPARTMENT OF AGRICULTURE › PART 201—ADMINISTERING THE PACKERS AND STOCKYARDS ACT › Subpart N—Packers and Live Poultry Dealers

9 C.F.R. § 201.200

Sale of livestock on credit

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(a) No packer whose average annual purchases of livestock exceed $500,000 shall purchase livestock on credit, and no dealer or market agency acting as an agent for such a packer shall purchase livestock on credit, unless: (1) Before purchasing such livestock the packer obtains from the seller a written acknowledgment as follows:

On this date I am entering into a written agreement for the sale of livestock on credit to ________________, a packer, and I understand that in doing so I will have no rights under the trust provisions of section 206 of the Packers and Stockyards Act, 1921, as amended (7 U.S.C. 196, Pub. L. 94-410), with respect to any such credit sale. The written agreement for such selling on credit

Covers a single sale. Provides that it will remain in effect until (date). Provides that it will remain in effect until canceled in writing by either party. (Omit the provisions not applicable.) Date Signature

(2) Such packer retains such acknowledgment, together with all other documents, if any, setting forth the terms of such credit sales on which the purchaser and seller have agreed, and such dealer or market agency retains a copy thereof, in his records for such time as is required by any law, or by written notice served on such person by the Administrator, but not less than two calendar years from the date of expiration of the written agreement referred to in such acknowledgment; and

(3) Such seller receives a copy of such acknowledgment.

(b) No dealer whose average annual purchases of livestock exceed $100,000 shall purchase livestock on credit unless:

(1) Before purchasing livestock on credit, the dealer obtains from the seller a written acknowledgement that includes the information described in this paragraph (b)(1).

(i) The following statement:

On this date I am entering into a written agreement for the sale of livestock on credit to ___, a dealer, and I understand that in doing so I will have no rights under the trust provisions of section 318 of the Packers and Stockyards Act, 1921, as amended (7 U.S.C. 217b), with respect to any such credit sale.

(ii) A statement about whether the credit sales agreement covers a single sale; covers multiple sales and remains in effect through a certain date and states the date; or remains in effect until canceled in writing by either party.

(iii) The date the seller signed the agreement.

(iv) The seller's signature.

(2) The dealer retains the written acknowledgment, together with all other documents, if any, setting forth the terms of credit sales on which the purchaser and seller have agreed, and the dealer retains a copy thereof, in their records for such time as is required by any law, or by written notice served on the dealer by the Administrator, but not less than two calendar years from the date of expiration of the written agreement referred to in the acknowledgment.

(3) The dealer provides a copy of the acknowledgment to the seller.

(c) Purchasing livestock for which payment is to be made by a draft which is not a check shall constitute purchasing such livestock on credit within the meaning of paragraphs (a) and (b) of this section. (See also § 201.43(b)(1).)

(d) The provisions of this section shall not be construed to permit any transaction prohibited by § 201.61(a) relating to financing by market agencies selling on a commission basis.

(Approved by the Office of Management and Budget under control number 0580-0015) [42 FR 49929, Sept. 8, 1977, as amended at 49 FR 39516, Oct. 9, 1984; 54 FR 37094, Sept. 7, 1989; 68 FR 75388, Dec. 31, 2003; 88 FR 41022, June 23, 2023]
Notes of Decisions
Cited in 7 cases, 1979–2012 · leading case: In Re Gotham Provision Co., Inc., Debtor/debtor in Possession, the First State Bank of Miami v. Gotham Provision Co., Inc., 669 F.2d 1000 (1st Cir. 1982).
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In Re Gotham Provision Co., Inc., Debtor/debtor in Possession, the First State Bank of Miami v. Gotham Provision Co., Inc., 669 F.2d 1000 (1st Cir. 1982). · cites it 2× “Under 9 C.F.R. § 201.200 (1981), 6 packers whose average annual purchases exceed $500,000 may not purchase livestock on credit unless the packer obtains from the seller a written acknowledgment that the seller agrees to make the sale on credit and that the seller waives his…”
In Re Frosty Morn Meats, Inc., 7 B.R. 988 (M.D. Tenn. 1980). · cites it 3× “In view of the holding herein, it is unnecessary to consider 9 C.F.R. 201.200 and its effect on the purported trust waivers, as asserted in the brief filed by the United States Attorney.”
Bast v. Orange Meat Packing Co. (In Re G & L Packing Co.), 20 B.R. 789 (Bankr. N.D.N.Y. 1982). · cites it 2× “The governing regulation is 9 C.F.R. 201.200. Before any credit purchase of livestock by a packer with annual purchases exceeding $500,-000.”
Gibson v. Arbogast & Bastian, Inc. (In Re Arbogast & Bastian, Inc.), 42 B.R. 633 (Bankr. E.D. Pa. 1984). · cites it 5× “” 9 C.F.R. § 201.200 , which was issued by the Secretary of Agriculture under the authority of 7 U.”
Bast v. Orange Meat Packing Co. (In Re G & L Packing Co.), 41 B.R. 903 (N.D.N.Y. 1984). “See 9 C.F.R. § 201.200 (1981). Since the transactions in question did not involve written extensions of credit, it was correct to treat them as “cash sales” within the meaning of the Act.”
First State Bank of Miami v. Gotham Provision Co. (In Re Gotham Provision Co.), 1 B.R. 255 (Bankr. S.D. Florida 1979). “Additionally, the writing does not comply with the United States Department of Agriculture’s regulation governing the extension of credit in livestock sales, 9 C.F.R. § 201.200 . This regulation requires clear language for an extension of credit and further requires that it be…”
In re Coop de Consumidores del Noroeste, 464 B.R. 525 (Bankr. D.P.R. 2012). · cites it 7× “§ 228b(b) 5 and 9 C.F.R. § 201.200 . Once a seller of livestock has sold (livestock) on credit to a packer, the seller waives the statutory trust protection afforded by PASA.”
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