Federal & Healthcare
Packers and Stockyards Bond
A Packers and Stockyards bond is the federal bond USDA requires of livestock markets, dealers, and packers to protect sellers who are owed payment.
- Required by
- USDA under the Packers and Stockyards Act (9 CFR 201.29 to 201.30)
- Bond amount
- Formula set by 9 CFR 201.30 based on average livestock sold or purchased, with a $10,000 minimum
What this bond guarantees
The bond secures the registrant's financial obligations in buying and selling livestock. If a market agency, dealer, or packer fails to pay livestock sellers or consignors, they may claim on the bond. USDA administers the requirement under the Packers and Stockyards Act.
Who needs it
- Livestock auction markets (market agencies)
- Livestock dealers and order buyers
- Meat packers buying more than $500,000 of livestock a year
What the underwriter looks at
- Livestock volume in the prior business year
- Financial statements
- Clearing arrangements with other market agencies
Requirements vary by state and by who asks for the bond. Send us the request you received and we will confirm exactly what it calls for.
Common questions
How is the bond amount figured?
For dealers and buying agencies, USDA averages purchases over two business days from the prior year, rounds up to the next $5,000, and adds only 10 percent of any amount over $75,000. The minimum is $10,000 or higher if state law requires.
Are small packers exempt?
Yes. Packers whose annual livestock purchases do not exceed $500,000 are exempt from the bond requirement.