Release No.: 123-18
WASHINGTON, Aug. 31, 2018 – On August 15, 2018, the U.S. Department of Agriculture (USDA), Agricultural Marketing Service (AMS), Fair Trade Practices Program (FTPP) issued a complaint against Carolina Stockyard Company Inc. (Carolina), Staley, N.C., for alleged violations of the Packers and Stockyards Act (the Act).
On September 11, 2012, Carolina entered into a stipulation agreement and paid a $2,000 civil penalty. The stipulation addressed shortages found to exist in Carolina’s custodial account for shippers’ proceeds in February and March 2012. In signing the stipulation, Carolina provided AMS with information that it had corrected the shortages. Carolina then received a notice of violation (NOV) from AMS on June 26, 2014. AMS sent the NOV to Carolina in response to Carolina’s disclosure of a shortage in its custodial account as of December 31, 2013. The NOV instructed Carolina to correct the shortage, and to provide AMS with a special report showing the status of its custodial account as of June 30, 2014. Carolina filed the special report with AMS. The report showed that as of June 30, 2014, the custodial account was no longer short.
During an investigation into the status of the custodial account at Carolina, AMS discovered that the custodial account was short by $616,703 as of July 3, 2014, and by $272,068 as of August 1, 2014. These shortages were due, in part, to Carolina’s failure to reimburse the custodial account for amounts due from buyers for their livestock purchases within the time period allowed under the Act.
The investigation also revealed that Carolina had developed and implemented a livestock insurance program of its own creation but failed to make or publish any rules or regulations regarding the program. Carolina also failed to keep or maintain records regarding claims made by consignors for loss of value due to livestock injuries or death. Carolina also failed to keep or maintain records regarding payments made on claims filed by consignors under the program for these same types of livestock related losses.
The Packers and Stockyards Act is a fair trade practice and payment protection law that promotes fair and competitive marketing environments for the livestock, meat and poultry industries.
For further information about the Packers and Stockyards Act, contact Stuart Frank, Director, Packers and Stockyards Division, Fair Trade Practices Program, at (515) 323-2586, or by email at Stuart.Frank@ams.usda.gov.
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