Update to Packers and Stockyards

P&S Modernization Covers Online Cattle Sales and Payments

Victoria G Myers
By  Victoria G. Myers , Progressive Farmer Senior Editor
Producers who buy and sell cattle online would see the same protections as those using fixed facility auctions if a new amendment to the Packers and Stockyards Act passes. (DTN/PF photo by Victoria G. Myers)

Hoping to amend the nearly 100-year-old Packers and Stockyards Act (P&S), HR 5883 was introduced in the House of Representatives by David Rouzer, R-N.C., a member of the House Committee on Agriculture.

The bill followed a nine-stop listening tour and meetings between ag groups and the Livestock Marketing Association (LMA), held throughout 2015. Changes proposed specifically focus on online and video livestock auctions, and clarify that P&S requirements apply to any of these type sales that charge a commission or other fee and handling, or provide a means to handle, funds due sellers.

Chelsea Good, vice president of government and industry affairs with LMA, noted P&S is an antiquated law, passed in 1921. Over the years, she said, slight updates to the Act have taken place but there had never been a comprehensive overhaul. She said HR 5883 narrows the recommended changes to two "commonsense modernizations" that LMA felt possible to pass this year.

In a background report on the need to update P&S, the LMA noted more livestock were being sold through online and video auctions, and the P&S, as it currently stands, was not clear as to what extent these sales were covered by the P&S.

"We wanted to clarify that if you are selling and handling producers' money, the same protections should exist as in a fixed-facility auction," Good explained.

That is the first change recommended in HR 5883, "Technical and Clarifying Amendments to the Packers and Stockyards Act of 2016".

The LMA background report detailed this with the following: "This change ensures that people selling through online and video auctions are provided similar protections as those who sell at a fixed-facility livestock market. Businesses currently selling livestock online, including many LMA members, already follow the law's prompt payment, custodial account and bonding requirements, so this will not change their business practices. However, the lack of clear USDA authority in this area is concerning. This change will help ensure that producers get the law's financial protections whether they sell at a fixed-facility market or through an online or video auction."

Good said the other piece of the bill focuses specifically on payment methods.

"We need to recognize that banking practices have modernized, and as long as you are following the timelines, surely you should be able to use a quicker form of payment," she explained.

HR 5883 would allow those additional forms of payment common today, including use of an Automated Clearing House, credit and debit cards. LMA's report added that no current payment options would be excluded, but it was hoped that by allowing for quicker payment, the risk of defaults would be reduced.

Good told DTN she was cautiously optimistic the law could be passed to amend P&S this year. She added the timeline would be tight.

"Our members of Congress won't return from their August recess until September, and when they do there will be a limited number of legislative days before they break again for election season," she said. "We feel we've done the work and there seems to be a lot of support for this. September will be a key timeframe for this to go through."

(VM/CZ)

Victoria Myers