Information for Live Poultry Dealers

A live poultry dealer is a business that buys live birds, raises birds under a contract for slaughter, or sells live birds for slaughter.

The link below lists these businesses.  They are subject to the statutory trust provisions as live poultry dealers.  The list and bond amounts are current as of the file date. Contact a  Packers and Stockyards Division (PSD) regional office with any questions concerning the listed files.

Live Poultry Dealer Responsibilities

Some of the basic responsibilities of live poultry dealers under the Act are described below. Review the P&S Act and the Regulations issued thereunder, for a complete list of live poultry dealers’ legal responsibilities.

Prompt Payment

  • For birds raised under contract, you must pay the grower within 15 days of the week they were slaughtered
  • For birds bought in a cash sale. You must pay by the end of the next business day.

Maintain Accurate Scales

[9 CFR §201.71 – 9 CFR §201.72]

Scales used for weighing live poultry or feed must be accurate.

Weighing Poultry and Feed

  • Only trained and qualified staff should do the weighing. 
  • Weighmasters must read and sign an Acknowledgment Form saying they know the rules. 
  • Before weighing, check that the scale reads zero. 
  • Keep the scale balanced at zero at all times:
    • (1) Check it every 15 minutes or after every 15 groups of birds 
    • (2) Check it after every draft of more than half the scale capacity.  
    • (3) Record the time of zero balance check. 
    • (4) Weigh each group of birds to the nearest scale division
  • The weighmaster must be fair to both buyer and seller, print tickets only when the scale is settled, allow interested people to watch, and re-weigh if asked.

Immediate Weighing

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 the processing plant.

Trust Protections

If a live poultry dealer does not pay for poultry, the money and assets from those birds become a “trust.” The dealer must hold this trust for the benefit of all unpaid sellers or growers.  These sellers and growers have first priority for payment if the business fails.

Fair Treatment

The law forbids any unfair, discriminatory, or deceptive practices.

Contracts with Growers

  • Growers must be provided a full written copy of the contract and coop specifications.
  • Growers can discuss their contract offer with advisors, family, or other growers.
  • The contract must clearly state its length, how to end it, payment terms, and any performance improvement plans.
  • The contract must tell growers they have the right to cancel it, how to cancel, and the deadline (usually 3 business days after signing if a date is not specifically given).
  • The first page of the contract must have a clear notice stating that large new investments in buildings or equipment may be required during the contract.

Note: The requirements (in 9 CFR 201.100(a) and (b)) apply to new contract offers beginning on January 4, 2010.

New Building or Equipment Costs

The first page of a poultry growing contract must have a clear, bold notice.  This notice must warn growers that they may need to pay for large new building or equipment costs during the contract

The USDA will check if a requirement for new investments is unfair and violates the P&S Act, they will consider things like:

  • Did the grower have a real choice to say no?
  • Was the grower forced or threatened into it?
  • Is the company planning to slow down or close the plant within 12 after demanding the new investment (barring any catastrophic events)?
  • Did the company require the investment from only some growers, but not others in the same situation?
  • How old are the grower’s current facilities, and have they made recent upgrades?
  • Can the grower realistically earn back the cost of the new investment?
  • Did the company give the grower enough time to make the changes?
  • Is the company requiring changes to equipment that it already approved and that still works?  If so, the company should help pay for it.

Note: These rules apply to contracts started or changed after February 7, 2012.

Resolving Disputes

A poultry growing contract requiring arbitration must also state that the grower may choose to opt out of arbitration before signing.  A grower who opts out retains the right to resolve disputes in court.  Both parties may later agree in writing to use arbitration after a dispute occurs.  Any action preventing a grower from opting out violates the law.

The contract signature page must contain specific language allowing the grower to decline arbitration. See regulation 201.218 for the mandatory language. 

Requirements for a Fair Arbitration Process

The USDA evaluates arbitration fairness using several criteria:

  • The contract must clearly disclose all grower costs, the arbitration process, and any limits on legal rights.
  • Arbitration costs and time limits must be reasonable.
  • The grower must have access to relevant information held by the dealer.
  • Arbitration must only cover disputes related to the contract.
  • The arbitrator must provide a written decision that explains the legal reasoning.

Note: These rules apply to contracts started or changed  after February 7, 2012.

Required Paperwork

A live poultry dealer must give the grower a clear settlement sheet at the time of payment. This sheet must show exactly how the dealer calculated the grower’s payment.

Additional documents due the grower or seller at settlement.

  • If USDA grades or condemnations affect payment, the dealer must give the grower a copy of that certificate.
  • If payment is based on a grower ranking, the dealer must give each grower a ranking sheet. This sheet must show the grower’s position and the scores used for all growers, but not other growers’ names.
  • For cash sales, the dealer must give the seller an invoice with all payment details at settlement.

Suspending Bird Deliveries

When a dealer suspends deliveries, the USDA will check if the dealer gave proper notice. Reasonable notice must state the reason, length, and restart date for the suspension.  An emergency like a natural disaster may excuse a lack of notice.

Fixing a Breach of Contract

  • If a dealer believes a grower has broken the contract and may terminate it, the dealer must first provide a written notice.  A reasonable notice must include:A description of the problem and the contract section involved.
  • The date of the breach.
  • Instructions on how to fix the problem.
  • A reasonable deadline for fixing it, considering the grower’s ongoing duties.  The notice must also give the grower adequate time to respond to the allegation.

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.

Termination notice

A dealer must give a grower a written termination notice at least 90 days before ending the contract. The notice must state the reasons and the effective date.  The contract must also give the grower the right to terminate it with 90 days’ written notice. 

Annual Reports and Inspections

Every live poultry dealer must file an annual report form (form PSD-3002 (pdf) with PSD. A live poultry dealer must complete and submit on a yearly basis. View the PSD 3002 Form Instructions (pdf). Dealers must also allow authorized USDA representatives to inspect their business records and facilities during normal hours.

Note: The suspension, breach, and termination rules apply to contracts created or modified after February 7, 2012.  The 90-day termination rule applies to all contracts

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