7 U.S.C. § 228b

Prompt payment for purchase of livestock

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(a) Full amount of purchase price required; methods of payment

Each packer, market agency, or dealer purchasing livestock shall, before the close of the next business day following the purchase of livestock and transfer of possession thereof, deliver to the seller or his duly authorized representative the full amount of the purchase price: Provided, That each packer, market agency, or dealer purchasing livestock for slaughter shall, before the close of the next business day following purchase of livestock and transfer of possession thereof, actually deliver at the point of transfer of possession to the seller or his duly authorized representative a check or shall transfer funds for the full amount of the purchase price to the account of the seller by wire, electronic funds transfer, or any other expeditious method determined appropriate by the Secretary for the full amount of the purchase price; or, in the case of a purchase on a carcass or “grade and yield” basis, the purchaser shall make payment by check at the point of transfer of possession or shall transfer funds for the full amount of the purchase price to the account of the seller by wire, electronic funds transfer, or any other expeditious method determined appropriate by the Secretary for the full amount of the purchase price not later than the close of the first business day following determination of the purchase price: Provided further, That if the seller or his duly authorized representative is not present to receive payment at the point of transfer of possession, as herein provided, the packer, market agency or dealer shall transfer funds for the full amount of the purchase price by wire, electronic funds transfer, or any other expeditious method determined appropriate by the Secretary or place a check in the United States mail for the full amount of the purchase price, properly addressed to the seller, within the time limits specified in this subsection, such action being deemed compliance with the requirement for prompt payment.

(b) Waiver of prompt payment by written agreement; disclosure requirements

Notwithstanding the provisions of subsection (a) of this section and subject to such terms and conditions as the Secretary may prescribe, the parties to the purchase and sale of livestock may expressly agree in writing, before such purchase or sale, to effect payment in a manner other than that required in subsection (a). Any such agreement shall be disclosed in the records of any market agency or dealer selling the livestock, and in the purchaser’s records and on the accounts or other documents issued by the purchaser relating to the transaction.

Any delay or attempt to delay by a market agency, dealer, or packer purchasing livestock, the collection of funds as herein provided, or otherwise for the purpose of or resulting in extending the normal period of payment for such livestock shall be considered an “unfair practice” in violation of this chapter. Nothing in this section shall be deemed to limit the meaning of the term “unfair practice” as used in this chapter.

(Aug. 15, 1921, ch. 64, title IV, § 409, as added Pub. L. 94–410, § 7, Sept. 13, 1976, 90 Stat. 1250; amended Pub. L. 114–237, § 3, Oct. 7, 2016, 130 Stat. 970.)Editorial NotesAmendments

2016—Subsec. (a). Pub. L. 114–237, § 3, substituted “shall transfer funds for the full amount of the purchase price to the account of the seller by wire, electronic funds transfer, or any other expeditious method determined appropriate by the Secretary” for “shall wire transfer funds to the seller’s account” in two places in first proviso and “or dealer shall transfer funds for the full amount of the purchase price by wire, electronic funds transfer, or any other expeditious method determined appropriate by the Secretary” for “or dealer shall wire transfer funds” in second proviso.

Notes of Decisions

Cited in 27 cases (3 in the last 5 years), 1978–2026 · leading case: Fillippo v. S. Bonaccurso & Sons, Inc., 466 F. Supp. 1008 (E.D. Pa. 1978).

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Fillippo v. S. Bonaccurso & Sons, Inc., 466 F. Supp. 1008 (E.D. Pa. 1978). · cites it 17× “Unless he was a “seller,” plaintiff was not entitled to next day payment under 7 U.S.C. § 228b. A regulation in effect at the time treats an agent like a “seller” once the agent pays the debt incurred by purchasing livestock for his packer-principal, and gives the agent the…”

Hedrick v. S. Bonaccurso & Sons, Inc., 466 F. Supp. 1025 (E.D. Pa. 1978). · cites it 10× “Defendant Continental argues that plaintiff was not a cash seller because “not once during the six months preceding cessation of operations by [SBI], did they request, require or indeed expect [SBI] to pay for delivery of cattle in accordance with the prompt payment provisions…”

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 4× “Section 206 itself does not indicate what constitutes an express extension of credit, but § 409 of the Act, 7 U.S.C.A. § 228b (West 1980) provides some assistance.”

Beef Nebraska, Inc., a Nebraska Corp. v. United States of Am., United States Dep't of Agric., 807 F.2d 712 (8th Cir. 1986). · cites it 2× “The judicial officer held that Beef Nebraska’s use of checks drawn on a distant bank to pay for livestock often lengthened the check-clearing process by at least one day, and hence delayed the “collection of funds” in violation of § 409(c) of the Act, 7 U.S.C. § 228b(c) (1982)…”

Ensminger v. Burton, 805 S.W.2d 207 (Mo. Ct. App. 1991). · cites it 2× “7 U.S.C. § 228b (1980). A delay in payment of the sales proceeds constitutes an unfair practice under the Act and incurs a penalty.”

Bast v. Orange Meat Packing Co. (In Re G & L Packing Co.), 20 B.R. 789 (Bankr. N.D.N.Y. 1982). · cites it 3× “7 U.S.C. § 228b (Emphasis added). Undis-putedly, Orange is a “packer” within the P & S Act with statutory trustee duties.”

Pennsylvania Agric. Coop. Mktg. Ass'n v. Ezra Martin Co., 495 F. Supp. 565 (M.D. Penn. 1980). · cites it 2× “§ 204 , and prompt payment requirements, 7 U.S.C. § 228b. Through the 1976 amendments, Congress specifically intended to prevent recurrences of the catastrophic losses suffered by livestock suppliers in the 1976 bankruptcy of American Beef Packers.”

Sanborn Cnty. Bank, Inc. v. Magness Livestock Exch., Inc., 410 N.W.2d 565 (S.D. 1987). · cites it 2× “7 U.S.C. § 228b (1982). He claims this provision preempts state law.”

In Re Frosty Morn Meats, Inc., 7 B.R. 988 (M.D. Tenn. 1980). · cites it 2× “” The prompt payment provisions of the Packers and Stockyards Act found in 7 U.S.C. § 228b are also pertinent. The requirements of § 228b are consistent with the congressional intent and the custom in the livestock industry that purchases of livestock are on a cash basis, unless…”

United States v. Walter Dunlap & Sons, Inc., in 85-1671. United States of Am. v. New Holland Sales Stables, Inc., in 85-1673, 800 F.2d 1232 (3rd Cir. 1986). “Customarily, the farmers bring livestock to defendants the day before the scheduled sale, and in accordance with the dictates of the Packers and Stockyards Act, 7 U.S.C. § 228b (1982), the brokers pay the farmers in full within twenty-four hours of the sale.”

Jorgensen v. John Clay & Co., 660 P.2d 229 (Utah 1983). “7 U.S.C. § 228b, Reg. of Sec. of Agriculture, Packers and Stockyards Act, 9 C.”

Gerace v. Utica Veal Co., Inc., 580 F. Supp. 1465 (N.D.N.Y. 1984). · cites it 2× “Section 228b, in addition to requiring payment by a packer on the next day following purchase and transfer of livestock, requires payment of “the full amount of the purchase price.”

Show all 27 citing cases →

— 7 U.S.C. § 228b(a) — 10 cases

Fillippo v. S. Bonaccurso & Sons, Inc., 466 F. Supp. 1008 (E.D. Pa. 1978). “Unless he was a “seller,” plaintiff was not entitled to next day payment under 7 U.S.C. § 228b. A regulation in effect at the time treats an agent like a “seller” once the agent pays the debt incurred by purchasing livestock for his packer-principal, and gives the agent the…”

Hedrick v. S. Bonaccurso & Sons, Inc., 466 F. Supp. 1025 (E.D. Pa. 1978). “Defendant Continental argues that plaintiff was not a cash seller because “not once during the six months preceding cessation of operations by [SBI], did they request, require or indeed expect [SBI] to pay for delivery of cattle in accordance with the prompt payment provisions…”

Rudiger Charolais Ranches, a Canadian Corp. v. Van De Graaf Ranches, a Washington Corp., 994 F.2d 670 (9th Cir. 1993).

Bast v. Orange Meat Packing Co. (In Re G & L Packing Co.), 20 B.R. 789 (Bankr. N.D.N.Y. 1982). “7 U.S.C. § 228b (Emphasis added). Undis-putedly, Orange is a “packer” within the P & S Act with statutory trustee duties.”

Gerace v. Utica Veal Co., Inc., 580 F. Supp. 1465 (N.D.N.Y. 1984). “Section 228b, in addition to requiring payment by a packer on the next day following purchase and transfer of livestock, requires payment of “the full amount of the purchase price.”

— 7 U.S.C. § 228b(b) — 9 cases

Vance v. Reed, 495 F. Supp. 852 (M.D. Tenn. 1980).

In re Coop de Consumidores del Noroeste, 464 B.R. 525 (Bankr. D.P.R. 2012).

— 7 U.S.C. § 228b(c) — 7 cases

Beef Nebraska, Inc., a Nebraska Corp. v. United States of Am., United States Dep't of Agric., 807 F.2d 712 (8th Cir. 1986). “The judicial officer held that Beef Nebraska’s use of checks drawn on a distant bank to pay for livestock often lengthened the check-clearing process by at least one day, and hence delayed the “collection of funds” in violation of § 409(c) of the Act, 7 U.S.C. § 228b(c) (1982)…”

Ensminger v. Burton, 805 S.W.2d 207 (Mo. Ct. App. 1991). “7 U.S.C. § 228b (1980). A delay in payment of the sales proceeds constitutes an unfair practice under the Act and incurs a penalty.”

Nicholas v. Snider (M.D. Penn. 2021).

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