Live Poultry Dealer
Purchases live poultry, obtains live poultry under a poultry growing arrangement for slaughter or sells it for slaughter by another.
Urgent Information for Poultry Dealers
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Please contact your regional office(s) listed on this page PSP Offices.
Note: These lists include certain regulated entities subject to the Packers and Stockyards Act - those that are required to maintain a bond (market agencies, dealers, and packers) and those subject to the statutory trust provisions (bonded packers and live poultry dealers). The lists and bond amounts are current as of the date listed on the linked file. Once you open a file you can use the "Find" option under the "Edit" menu to locate specific regulated entities. The listed business addresses are most often mailing addresses. Please contact a Packers and Stockyards Division (PSD) regional office with any questions concerning these lists.
The following are some basic responsibilities for live poultry dealers. Please refer to the Packers and Stockyards Act, 1921, as amended and supplemented, and the Regulations issued there under, for a complete list of legal responsibilities.
Live poultry obtained under a poultry growing arrangement must be paid for by the close of the 15th day following the week in which the poultry is slaughtered. Live poultry dealers must pay before the close of the next business day for live poultry obtained in a cash sale.
All scales used by those subject to the P&S Act to weight live poultry or feed for purposes of purchase, sale, acquisition, payment, or settlement, must be installed, maintained, and operated to ensure accurate weights, in accordance with the applicable requirements in the National Institute of Standards and Technology (NIST) Handbook 44, "Specifications, Tolerances, and Other Technical Requirements for Weighing and Measuring Devices." All such scales must be tested for accuracy by a competent agency at least twice during each calendar year-once between January 1 and June 30 and once between July 1 and December 31. You must have a minimum of 120 days between these two tests. Except that if you use such scales on a limited seasonal basis (during any continuous 8-month period) for purposes of purchase, sale, acquisition, payment or settlement, you may use such scales within a 8-month period following each test. The certification form must be filed with the regional PSD office. Such scales must be equipped with a printing device which will record weight values on a scale ticket or other document. Any scale known to be inaccurate may not be used.
Only competent, trained weighmasters should weigh live poultry or poultry feed. All weighermasters must read and sign an Acknowledgment Form certifying that they have read the Instructions for Weighing Livestock or Poultry. The weighmaster should ensure that the scale will provide accurate weights prior to weighing. The weighmaster should keep the scale balanced at zero at all times; check the zero balance every 15 minutes or 15 drafts, and after every draft of more than half the scale capacity; record the time of zero balance check; and weigh each draft of poultry to the nearest scale division. The weighmaster should favor neither the buyer nor the seller; print a scale ticket only while poultry is on scale and scale has settled; complete the scale ticket; allow persons having a legitimate interest in a draft of poultry to observe the weighing; and reweigh a draft of poultry immediately if requested.
Whenever live poultry is obtained under a poultry growing arrangement, the poultry shall be transported promptly after loading and the gross weight for grower payment purposes shall be determined immediately upon arrival at a the processing plant.
If a live poultry dealer fails to pay for live poultry, the receivables, inventories, and proceeds derived from such purchases in cash sales or by poultry growing arrangement become trust assets by operation of law. The live poultry dealer must hold these assets for the benefit of all unpaid cash sellers and/or poultry growers. Cash sellers and poultry growers are legally in priority payment position in bankruptcy or in claims against trust assets in the event of a business failure.
It is unlawful for any live poultry dealer to engage in or use any unfair, unjustly discriminatory, or deceptive practice or device.
Records to be furnished poultry growers and sellers
Each live poultry dealer who offers a poultry growing arrangement to a poultry grower must provide the poultry grower with a true written copy of the offered arrangement along with the poultry house specifications. Notwithstanding any confidentiality provision in the poultry growing arrangement, each live poultry dealer must allow poultry growers to discuss the terms of a poultry growing arrangement offer with a Federal or State agency, the grower's financial advisor or lender, the grower's legal advisor, an accounting services representative hired by the grower, other growers for the same live poultry dealer, or a member of the grower's immediate family or a business associate. (1)
Each live poultry dealer that enters into a poultry growing arrangement with a poultry grower must furnish the grower with a true written copy of the poultry growing arrangement. The arrangement must clearly specify the duration of the contract and conditions for termination of the contract by each of the parties; all terms related to the payment to be made to the poultry grower; whether a performance improvement plan exists for that grower, and, if so, any relevant performance plan guidelines.(2)
Disclosure of Producer Right to Cancel
Each live poultry dealer must disclose in its poultry growing arrangements the poultry grower's right to cancel the contract; the method in which the grower may cancel the contract; and the deadline for canceling the contract. Poultry growers have until the later of (a) the date that is 3 business days after the date when the poultry growing arrangement is executed, or (b) any cancellation date specified in the contract to mail a cancellation notice to the live poultry dealer.
Disclosure of Additional Capital Investments
Each live poultry dealer must disclose on the first page of its poultry growing arrangements a statement identified as Additional Capital Investments Disclosure Statement, which conspicuously states that additional large capital investments may be required of the poultry grower during the term of the contract. (3)
When determining whether a requirement of additional capital investments over the life of a poultry growing arrangement constitutes a violation of the P&S Act, the criteria the Secretary of Agriculture may consider includes, but is not limited to, whether:
- A live poultry dealer failed to give a poultry grower discretion to decide against the additional capital investment requirement.
- The additional capital investment is the result of coercion, retaliation or threats of coercion or retaliation.
- The live poultry dealer, absent the occurrence of a catastrophic or natural disaster, or other emergency, such as unforeseen bankruptcy, intends or does substantially
- Reduce/ end operations at the slaughter plant or processing facility, or
- Reduce/end production operations within 12 months of requiring the additional capital investment.
- The live poultry dealer required some poultry growers to make additional capital investments, but did not require other similarly situated poultry growers to make the same additional capital investments.
- The age and number of recent upgrades to, or capital investments in, the poultry grower’s operations.
- The cost of the required additional capital investments can reasonably be expected to be recouped by the poultry grower.
- A reasonable time period to implement the required additional capital investments is provided to the poultry grower.
- Equipment changes are required with respect to equipment previously approved and accepted by the live poultry dealer, if existing equipment is functioning as it was intended to function, unless the live poultry dealer provides adequate compensation incentives to the poultry grower. (6),
Forum for Resolving Disputes and Choice of Law
The forum for resolving any dispute among the parties to a poultry growing arrangement that arises out of that contract must be located in the Federal judicial district in which the principle part of the performance takes place under the contract. A poultry growing arrangement may specify which State's law is to apply to issues governed by State law in any dispute arising out of the contract, except to the extent that doing so is prohibited by the law of the State in which the principal part of the performance takes place under the contract.
Any poultry contract that contains a provision requiring the use of arbitration to resolve any controversy that arises under the contract must contain a provision disclosing that a poultry grower, prior to entering the contract, may opt out of the arbitration provision. Any poultry grower that opts out of an arbitration requirement prior to entering the contract has the right to seek to resolve any controversy that may arise under the contract, if, after the controversy arises, both parties consent in writing to use arbitration to settle the controversy. Any action by or on behalf of a live poultry dealer with the intent or effect of limiting the ability of a poultry grower to opt out of the arbitration provision is an unlawful practice under the P&S Act. (4)
Production contracts that require the use of arbitration must include specific language on the signature page that allows the poultry grower to decline arbitration. See regulation 201.218 for the mandatory language.
When determining if the arbitration process provided in a contract provides a meaningful opportunity for the poultry growers to participate fully in the arbitration process, the criteria the Secretary of Agriculture may consider includes, but is not limited to, whether:
- The contract discloses sufficient information in bold, conspicuous print describing
- all the costs of arbitration to be paid by the poultry grower,
- the arbitration process, and
- any limitations on legal rights and remedies in such a manner as to allow the poultry grower to make an informed decision on whether to elect arbitration for dispute resolution.
- Provisions in the entire arbitration process governing the costs and time limits are reasonable.
- The poultry grower is provided access to and opportunity to engage in reasonable discovery of information held by the live poultry dealer.
- Arbitration is required to be used to resolve only disputes relevant to the contractual obligations of the parties.
- A reasoned, written opinion based on applicable law, legal principles and precedent for the award is required to be provided to the parties. (6)
Each live poultry dealer, who acquires poultry pursuant to a contract with a poultry grower, must prepare a true and accurate settlement sheet and furnish it to the grower at the time of settlement. The settlement sheet must contain all information necessary to compute the payment due the poultry grower.
Additional documents due the grower or seller at settlement.
If official U.S. Department of Agriculture condemnations or grades, or both, are a consideration affecting payment to the grower, the live poultry dealer must obtain the official U.S. Department of Agriculture condemnation or grading certificate, or both, for the poultry and furnish a copy to the grower prior to or at the time of settlement. Where payment to the poultry grower is based upon a grouping or ranking of poultry growers delivering poultry during a specified period, the live poultry dealer must furnish the grower, at the time of settlement, a copy of the grouping or ranking sheet which shows the precise position in the grouping or ranking for that period. The grouping or ranking sheet need not show the names of other growers, but it must show the actual figures upon which the grouping or ranking is based for each grower grouped or ranked during the specified period. Each live poultry dealer who purchases live poultry must prepare and deliver a purchase invoice to the sellers at the time of settlement which contains all information necessary to compute payment due the seller.
Suspension of Delivery of Birds
When determining whether a live poultry dealer has provided reasonable notice to poultry growers of any suspension of the delivery of birds under a poultry growing arrangement, the criteria the Secretary of Agriculture may consider includes, but is not limited to, whether:
- The written notice adequately states
- the reason for the suspension of delivery,
- the length of the suspension of delivery, and
- the anticipated date the delivery of birds will resume.
- catastrophic or natural disaster, or other emergency, such as an unforeseen bankruptcy, has occurred that has prevented a live poultry dealer from providing reasonable notice. (6)
Reasonable Period to Remedy Breach of Contract
When determining if a live poultry dealer has provided a reasonable period of time for a poultry grower to remedy a breach of contract that could lead to termination of a production contract, the criteria the Secretary of Agriculture may consider includes, but is not limited to, whether:
- The live poultry dealer provided written notice of the breach of contract to the poultry grower upon initial discovery of that breach of contract if the live poultry dealer intends to take an adverse action, including termination of a contract, against the poultry grower based on that breach of contract by the poultry grower.
- The notice includes:
- A description of the act or omission believed to constitute a breach of contract, including identification of the section of the contract believed to have been breached;
- The date of the breach;
- The means by which the poultry grower can satisfactorily remedy the breach, if possible, based on the nature of the breach; and
- A date that provides a reasonable time, based on the nature of the breach, by which the breach must be remedied.
- The live poultry dealer took into account the poultry grower’s ongoing responsibilities related to the raising and handling of the poultry under their care when establishing the date by which a breach should be remedied.
- The poultry grower was afforded adequate time from the date of the notice of the alleged breach to rebut the allegation of a breach. (6)
Note: These criteria do not limit a live poultry dealer’s rights under a contract or agreement where food safety or animal welfare is concerned.
A live poultry dealer that ends a poultry growing arrangement with a poultry grower due to a termination, non-renewal, or expiration and subsequent non-replacement of a poultry growing arrangement, must provide the grower with a written termination notice at least 90 days prior to the termination of the arrangement. Such notice shall be in writing and contain the reason(s) for termination, when termination is effective, and appeal rights, if any, that the poultry grower may have with the live poultry dealer. The live poultry dealer's poultry growing arrangement must also provide the poultry grower with the opportunity to terminate its poultry growing arrangement in writing at least 90 days prior to the termination of the poultry growing arrangement.(5)
Every live poultry dealer must file an annual report with PSD. A live poultry dealer will complete form P&SP-3002 on a yearly basis.
Inspection of business records and facilities
Each live poultry dealer, upon proper request, must permit authorized representatives of the Secretary of Agriculture to enter its place of business during normal business hours and to examine records pertaining to its business subject to the Act.
(1) The requirements (in 9 CFR 201.100(a) and (b)) apply to new contract offers beginning on January 4, 2010.
(2) The provision (in 9 CFR 201.100(c)(3)) which requires a live poultry dealer that enters into a poultry growing arrangement to furnish the grower with a true written copy that specifies information about any performance improvement plan that may exist. This requirement applies to new contracts and any existing contracts that are modified on or after January 4, 2010.
(3) The provision related to disclosure of additional capital investments (in Section 208 (b)(1) of the P&S Act (7 U.S.C. 197a)) applies to any swine production contract entered into, amended, altered, modified, renewed, or extended after June 18, 2008.
(4) The provisions related to arbitration (in Section 210 (a), (b), and (c) (7 U.S.C 197c)) apply to any contract entered into, amended, altered, modified, renewed, or extended after June 18, 2008.
(5) The provision (in 9 CFR 201.100(h)) which requires 90 days notice prior to termination of a poultry growing arrangement and provides the poultry grower opportunity to terminate 90 days prior to termination of a poultry growing arrangement, applies to all existing and future contracts.
(6) The regulations in this part, when governing or affecting contracts, shall apply to any poultry growing arrangement, or any other poultry contract entered into, amended, altered, modified, renewed or extended after February 7, 2012.
- Instructions for Weighing Live Poultry (PDF; 1221KB)
- Live Poultry Growers' and Sellers' Rights Under P&S Trust Provisions (PDF; 235KB)
- Responsibility for Accurate Scales and Live Poultry Weights (PDF; 247KB)