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LMA advocates for updates to GIPSA

Written by Emilee Gibb

After completing a nine-stop listening tour with agricultural groups, the Livestock Marketing Association (LMA) has identified key modernization changes needed in the Packers and Stockyards Act (P&S) of the Grain Inspection, Packers and Stockyards Administration (GIPSA).

The Act was enacted in 1921 and has not been thoroughly reviewed in decades, explains LMA Government and Industry Affairs Vice-President Chelsea Good.

“There has not been a wholesale review in more than 30 years in terms of really looking at the Act and if it matches our businesses today,” says Good.

The P&S Act is a fair trades practices act that historically focused on terminal stockyards and packers across the United States.

“The P&S Act is our main regulatory entity in terms of business practices,” Good notes.

The Act currently applies to market agencies selling on commission, packers and market agencies that are buying on commission. However, it does not apply to producers and cattle feeders.

“The current role of the P&S Act and the intent of the Act is to ensure financial security and fair trade practices within the livestock marketing industry,” she says.

Evolving industry

“Our industry has changed quite a bit since 1921,” comments Good. “Instead of a handful of terminal stockyards, we now have local and regional stockyard options across the United States.”

Since the Act has not been under a thorough review in decades, many requirements are outdated for the current livestock industry. However, Good says that the core role of the law remains the same for the present-day industry.

“I think going forward, there’s the core role that the law should continue to have,” she emphasizes. “However, there does need to be a really good look at the current requirements, whether or not they match our modern business practices and what updates need to be made to make sure that the law matches with our industry today.”

Main topics

Good explains that the topics of the P&S Act can be divided into two main categories.

“Really there’s two buckets. One of those buckets is financial protection, which is making sure people are paid and paid promptly for their livestock,” says Good.

Packers, livestock markets and dealers are required to be bonded according to the Act. Livestock markets are also required to have a custodial account, while packers must have a packer statutory trust. All entities are required to uphold the prompt payment requirement.

“These are all just tools to make sure that the people get paid for the livestock they sell,” Good notes.

The next category, she explains, involves fair trade practices.

“The second bucket is more of a competition, transparency, fair trade practices component, and it has a variety of requirements to make sure that business is being done in a fair, transparent manner.”

Updates

“There are two specific updates that we’re advocating for right now,” says Good.

The first update that LMA advocates for is clarifying the requirements for online video auctions in regard to the P&S Act.

“We would like to clarify that if someone is charging a fee or commission for selling livestock and they are handling money that is due to producers, they fall under those Packers and Stockyards Act requirements,” she continues. “Those same producer protections exist to producers selling online just like at a fixed facility livestock market.”

Good explains that most online auctions are already following the requirements under the P&S Act.

“They’re following those requirements, but the law is unclear about whether they have to. We just want to clarify that,” notes Good.

The second update that LMA advocates for is updating prompt payment requirements with modern payment methods. The law currently defines prompt payment as being a check placed in the mail by the close of the next business day or as a wire transfer.

“We want to clarify that other modern, fast payment methods, such as ACH, or Automated Clearing House transfer, are also another appropriate way to meet that prompt payment requirement,” she explains.

LMA plans for these changes to be made within one year.

“Our goal is that those are short-term updates. We’d like those to occur in 2016, so that’s a project that we’re pushing for this year,” concludes Good.

Emilee Gibb is editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.