Dealer, Market Agency Buying on Commission, and Clearing Agency

A dealer buys and sells livestock on its own account or as the employee or agent of the vendor or purchaser.  A market agency buying on commission buys livestock for a commission.  A market agency acting as a clearing agent agrees to provide bond and otherwise take financial responsibility for one or more market agency or dealer’s livestock purchases subject to the Packers and Stockyards Act (Act).

The following lists include regulated entities subject to the Act who are required to maintain a bond. 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. Please contact a Packers and Stockyards Division (PSD) regional office with any questions concerning the listed files.

Regulated Entities Listing

Dealer, Market Agency Buying on Commission, and Clearing Agency Responsibilities

The full law (the Packers and Stockyards Act, 1921) and its accompanying regulations have more details.  However, these are some key rules to follow.

Register

Every person operating or desiring to operate as a dealer, market agency buying on commission, or clearing agency, must apply for registration under the Act.

In order to register, complete the following form:

PSD-1000 - Application for Registration (pdf) | Instructions

File Bond

Every dealer, market agency buying on commission, and clearing agency must execute and maintain a reasonable bond or bond equivalent, to secure its obligations to livestock sellers. Dealers and market agencies buying on commission must select clause 2, and market agencies acting as clearing agencies for others must select clause 3 on the bond or bond equivalent form. The size of the bond or bond equivalent is based on the volume of business, generally an average of two days business.  The minimum bond is $10,000.

Pay Sellers Quickly

Every dealer, market agency buying on commission, and clearing agency purchasing livestock must deliver the full amount of the purchase price to the seller. Livestock buyers must pay sellers before the close of the next business day following the purchase and transfer of possession.”

Maintain Accurate Scales [9 CFR §201.71 – 9 CFR §201.72]

Scales used for buying/selling livestock or livestock carcasses must be accurate.

Follow official scale standards ( National Institute of Standards and Technology   Handbook 44, "Specifications, Tolerances, and Other Technical Requirements for Weighing and Measuring Devices.") 

A qualified scale test agency must test your scales twice each year.

Test once between July 1 – Dec. 31, with at least 120 days between tests.

Scales must print weight tickets.

Do not use a scale you know is inaccurate

Weigh Accurately

Only competent, trained weighmasters should weigh livestock. All weighmasters must read and sign an Acknowledgement Form certifying that they have read the regulations for weighing livestock and 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. To do so, (1) check the zero balance every 15 minutes or 15 drafts, and (2) after every draft of more than half the scale capacity. (3) Record when the zero balance check was made, and (4) weigh each draft of livestock to the nearest scale division. The weighmaster should (5) favor neither the buyer nor the seller; (6) print a scale ticket only while livestock is on scale and scale has settled; (7) complete the scale ticket; (8) allow persons with a legitimate interest in a draft of livestock to observe the weighing; and reweigh a draft of livestock immediately if requested.

Hold Assets for Unpaid Cash Sellers Under Dealer Trust

If a dealer fails to pay for livestock, the receivables, inventories, and proceeds derived from such purchases in cash sales become trust assets by operation of law. The dealer must hold these assets for the benefit of all unpaid cash sellers. Cash sellers are legally in priority payment position in bankruptcy or in claims against trust assets in the event of a business failure. Refer to the Pay Promptly section above. Any seller who extends credit to a packer will lose all rights under the Trust provisions.

Maintain Adequate Records

Every dealer and clearing agency must keep the accounts, records, and memoranda necessary to disclose fully and correctly, all transactions involved in his/her business. This includes the true ownership of the business.

File Annual Reports

Every dealer, market agency buying on commission, and clearing agency must file an annual report with PSD.

Each of these entities will complete and file form PSD-3001 (pdf) on a yearly basis. View the PSD-3001 form instructions (pdf)

Permit Inspection of Business Records and Facilities

Each dealer, market agency buying on commission, and clearing agency, 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.

Resources