Ensuring livestock sellers are paid for their sales is a fundamental premise of our livestock markets and dealer businesses. According to USDA data, sellers were paid in full and on time in 99.987% of livestock sales over the last 20 years.

Despite this excellent performance, in December 2020, a new law called Dealer Statutory Trust was enacted under the Packers and Stockyards Act. Due to being attached to COVID funding legislation, the new law bypassed the normal vetting processes in the House and Senate. Neither the House or Senate Agriculture Committees held hearings to consider or debate the legislation and its impact on the livestock industry. Despite longstanding livestock industry objections, this legislation became law.

The Dealer Statutory Trust law was intended to improve upon the 99.987% payment rate, but the law is deeply flawed and came with unintended consequences. For example, under the law, clean livestock title is not assured even if you paid in full for livestock you purchased. Receiving clear title is a hallmark of any livestock purchase. This law puts your purchased livestock at risk of being clawed back by a third party even if you paid in full for that purchase.

To date, the Dealer Statutory Trust law has proven to be a failure. According to USDA data, since its inception in January 2021 through September 2024, the recovery rate for unpaid sellers under Dealer Statutory Trust is only 1.2% of proceeds owed to the seller. For context, this is 1.2% of the 0.001% of unpaid sellers referenced above, a recovery rate of only 0.000012% of livestock sales.

ALMDA opposes the Dealer Statutory Trust and is working with USDA and Congress to modify the law to remove the negative consequences of this unnecessary legislation.