The U.S. Department of Agriculture (USDA) issued a complaint against Stephen Smeal and Mendy Smeal, a Texas partnership, doing business as Fatted Calf Cattle Farms #6 (Fatted Calf Cattle), on Nov. 30, 2021, for alleged violations of the Packers and Stockyards (P&S) Act.
An investigation by USDA’s Agricultural Marketing Service revealed that from Sept. 7, 2019, through Jan. 8, 2020, Fatted Calf Cattle issued ten checks to two markets that the bank did not pay when first presented because Fatted Calf Cattle failed to maintain sufficient funds to cover the checks. Eight of the ten checks resulted in delayed payment to the markets later than the parties’ credit agreements allowed. In these eight transactions, Fatted Calf Cattle purchased 278 head of livestock and paid $103,195, plus $260 in invoice adjustments, six to 37 days late.
The P&S Act requires subject entities to issue the full payment for livestock by the close of the first business day following purchase and transfer of possession. Failure to pay promptly for livestock purchases is an unfair trade practice and a violation of the P&S Act.
The P&S Act authorizes the Secretary of Agriculture to assess civil penalties up to $29,270 per violation against any person after notice and opportunity for hearing on the record. If the allegations are admitted or proven in a hearing, Stephen Smeal and Mendy Smeal may be ordered to cease and desist from continuing violations of the P&S Act, their partnership registration suspended for a specified period, they may be prohibited individually, for a specified period, from engaging in business in any capacity for which registration and bonding are required under the Act, and they may be assessed a civil penalty.
The P&S 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 Kraig Roesch, Packers and Stockyards Division, at (202) 720-7051, or by email at kraig.roesch@usda.gov.
