Farmers who are owed money for their livestock that was sold to the embattled processing plant at Postville in northeast Iowa got some good news last Friday. USDA announced that cattle producers and sale barns will receive more than $2 million in overdue payments for livestock they sold to the Agriprocessors meat packing plant.

The payouts were announced by former Governor Tom Vilsack, the new U.S. Secretary of Agriculture. The farmers and sale barns sold cattle to the plant before it filed bankruptcy last fall.

Such transactions normally are safeguarded by trusts set up under federal law. But the money was tied up in complicated bankruptcy proceedings surrounding Agriprocessors, which has been in financial turmoil since an immigration raid at the northeast Iowa meatpacking facility in May of 2008.

Farmers already receiving payments

A USDA press release says the payments to the farmers began last week, with coordination provided by the trustee overseeing the plant while it is in bankruptcy. The statement says 24 producers would receive payments ranging from $1,000 to more than $500,000.

Jay Johnson, regional director of USDA's Packers and Stockyards Administration, says the producers who received the payments were from Iowa, Minnesota, Illinois and Wisconsin. He says they were paid in full, with some money coming from the sale of meat that Agriprocessors had in storage.

Johnson says poultry producers who sold chickens to Agriprocessors should receive similar payments within a few weeks. The controversy over the livestock producers' missing payments had raised the concern of U.S. Senator Tom Harkin (D-IA) who pressed USDA to help sort out the mess.