A few simple steps can help ranchers get payment for their cattle.
By Jill J. Dunkel T
he sun peeks over the horizon and the cowboys spread across the pasture to drive the cows and
calves to the shipping pens. There, the calves will be separated from the cows, sorted, weighed and loaded on the semi-trailer. Heads will be counted, weights will be noted and shrink will be fi gured. It’s payday for the rancher. Transactions like this take place
across the country many times a day. It’s how the livestock industry has sold cattle for decades. And although there is likely a written contract, many deals are negotiated over the telephone or sealed with a handshake. Until the demise of Eastern Live-
stock, many ranchers loaded their year’s earnings onto a trailer and watched it disappear into the dust, con- fi dent the check in their hand would clear the bank — just another suc- cessful deal in the livestock business. Many cattlemen across the country
were left empty-handed and at the mer- cy of the bankruptcy court-appointed trustee. As a result, livestock owners are looking for ways to protect their interests and paychecks. “It’s always amazed me how in the
cattle business, millions of dollars are traded every day with a handshake and a phone call,” says Amarillo at- torney Kirk Crutcher. “It’s the nature of the business and it’s been that way a long time. I think it will continue to be that way.” However, one cannot dismiss the most important aspect of a cattle trade — getting your money.
agrees. “A lot of business is still done on a handshake, especially if you know the person. But everybody thought they knew Eastern, too.”
P&S rules and custodial accounts The Packers and Stockyards Act
(P&S), a federal law designed to pro- tect buyers and sellers of livestock from dishonest cattle buyers, states that cattle must be paid for promptly. But due to the nature of the business, many buyers are not on location when cattle are shipped to hand over imme- diate payment. The P&S Act states that the full
value of the livestock must be received by the seller before the close of the next business day following the sale of the livestock. The law allows for wire transfers or a check sent through the mail, set to arrive within the time frame. This wording basically gives the buyer 24 hours to hand over payment. By then, the cattle have left the ranch and could be more than a thousand miles away. There are several things a rancher
can do to help protect their yearly paycheck, Odle says. “Know who you are doing busi-
ness with,” he explains. “Deal with people you know, and don’t be afraid to check out their fi nancing. You don’t always have to do business with the big boys. But do business with some- one you feel is honest and you know what he’s doing.” Odle says when someone registers
for a buyer’s number at Superior Live- stock, they are giving Superior the authority to check with their banker. “And once they buy cattle, right be-
fore we deliver then, we double-check with their banker again. We’ve done that for years and continue to do so.” Another way to protect a seller’s interest is ask the order buyer or agent