When a livestock dealer defaults on producers and sale barns, such as in the case of the Eastern Livestock Co. in Kentucky, the losses can be catastrophic.

Rep. Roger Marshall, who represents the Big First District of Kansas, wants to provide legal recourse to producers and livestock auctions when such events occur. He has introduced bipartisan legislation to protect those entities, the Securing All Livestock Equitably Act.

The SALE Act would place livestock sold to a dealer, and proceeds and receivables from already sold livestock, into a trust until the original seller has been paid. This would ensure producers and livestock auctions have legal recourse in the event of a dealer default and/or bankruptcy.

In the Kentucky case, producers and livestock markets received 5 cents for every sales dollar in bond payments.

“Every weekend for two years growing up, I spent my Saturdays working at a sale barn in El Dorado, Kan.,” Marshall says. “And while that was hard work, today's world of cattle is a little more complicated than when I was sorting heifers and steers. Unfortunately, our friends at those sale barns are often left holding hot checks. This bill will help protect those businesses and the producers working with them.

“Current law puts our livestock producers and markets in the precarious position of being cheated out of millions of dollars of cattle by unfairly giving creditors priority over cattle they purchased, but never paid for. This bill would assure that producers and markets are paid for cattle.”

Rep. David Rouzer (R-N.C.), chairman of the House Ag Subcommittee on Livestock and Foreign Agriculture and a co-sponsor of the legislation, says, “Farmers and ranchers frequently have their livelihoods tied up in large livestock transactions. Putting in place protections in the transaction process will be vital to safeguarding our cattle producers and the overall market. I'm pleased to join my colleague, Congressman Roger Marshall, in introducing this bill, and look forward to working with the Agriculture Committee and our other colleagues to make it law.”

Rep. James Comer (R-Ky.), who was Kentucky's agriculture commissioner during the Eastern Livestock Co. case, says, “Having seen firsthand the devastation so many cattle farmers in Kentucky faced as a result of the Eastern Livestock scandal, I proudly support this amendment to the Packers and Stockyards Act. The livestock business can be difficult as it is. The last thing ranchers and livestock sellers need is to be left holding the bag when another business fails. This common-sense legislation provides them the protection they need against a dealer default, and a greater opportunity to be made whole.”