WASHINGTON, Mar. 10, 2025 – The U.S. Department of Agriculture (USDA) entered into a stipulation agreement with Salem Livestock Auction Inc., of Salem, Mo., on Jan. 14, 2025, resolving alleged violations of the Packers and Stockyards (P&S) Act. Under the agreement, Salem waived its right to a hearing and agreed to pay a civil penalty of $10,500.
A USDA Agricultural Marketing Service investigation revealed that Salem had custodial account shortages of $676,192 on Jan. 31, 2024, and $554,162, on Feb. 29, 2024. The custodial account shortages were partly due to Salem’s failure to reimburse the account for uncollected receivables by the close of the seventh day following a livestock sale. Salem also misused its custodial account by allowing unauthorized withdrawals to cover a business line of credit and non-sufficient funds fees.
A custodial account is a trust account required for handling proceeds from the sale of livestock. The market agency maintains this account to benefit livestock sellers. Failing to reimburse the custodial account on time is a violation of the P&S Act and its regulations.
The Secretary of Agriculture has authority under the P&S Act to act against violators, including issuing orders to cease and desist, suspending registrations, and applying other appropriate remedies as authorized by the Act. The USDA may also offer alleged violators the option to waive their right to a hearing and enter into a stipulation agreement to resolve the suspected violations quickly.
For information about the P&S Act, please contact Amy Blechinger, Packers and Stockyards Division, at (202) 720-7051 or Amy.R.Blechinger@usda.gov.
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