Produce and perishables
You loaded the truck, the buyer took delivery, the invoice went past due — and somewhere behind that buyer is a lender holding a security interest in all of its inventory and receivables. Produce is one of the few corners of commercial collections where that does not settle the question on its own: under 7 U.S.C. § 499e(c)(2) the commodities you shipped, all inventories of food or other products derived from them, and any receivables or proceeds from their sale are held in trust for unpaid suppliers, sellers, and agents until full payment is received. It is also the corner where waiting costs you the remedy outright, because § 499e(c)(3) says you lose the benefits of that trust unless you preserve it in writing within thirty calendar days.
What’s included
How it works
On every other kind of commercial account, a month’s delay costs you a month. On produce it can cost you the trust. Send the invoices with the delivery and acceptance dates, the bills of lading or manifests, the payment terms you actually agreed to and where they are written down, a copy of your invoice form itself, any dishonored check with the date you received notice of dishonor, and the buyer’s entity name as it appears on the purchase order. Call before the file is tidy if the dates are close — we would rather look at an incomplete file inside the window than a complete one outside it.
The first pass is the calendar, not the phone. The regulatory default for a buyer is payment within ten days after the day the produce is accepted (7 C.F.R. § 46.2(aa)(5)), and the thirty calendar days in § 499e(c)(3) run from the earliest of that deadline, a different deadline the parties agreed to in writing before the transaction, or the day you received notice that a promptly presented payment instrument was dishonored — the same three triggers restated in 7 C.F.R. § 46.46(f)(2). Calendar days include Saturdays, Sundays, and holidays, and 7 C.F.R. § 46.46(a)(4) moves a thirtieth day that falls on a weekend or holiday to the next day on which there is postal delivery. We have worked commercial accounts for more than twenty-five years — upward of ten thousand of them, and more than $250 million recovered across that history — and on produce files the first question is never the balance. It is the date.
With the trust question settled either way, the account gets worked: the principals directly, negotiation by someone who has run these files, and in-person contact at the buyer’s place of business where the records support it. Where enforcement is warranted it goes to licensed collection attorneys in the buyer’s own jurisdiction — nationwide through a network of licensed collection attorneys — with court costs reviewed with you before anything is filed. We are a collection agency, not a law firm, so suit, liens, and legal advice are counsel’s work and never ours. The fee is agreed before you place anything, and anything collected is remitted with a statement of the amount collected and the agreed fee.
FAQ
Under 7 U.S.C. § 499e(c)(2), a commission merchant, dealer, or broker who receives perishable agricultural commodities holds those commodities — along with all inventories of food or other products derived from them, and any receivables or proceeds from their sale — in trust for all unpaid suppliers, sellers, and agents until full payment is received. Congress’s own finding in § 499e(c)(1) is that financing arrangements under which an unpaid buyer encumbers those commodities, inventories, and receivables, or gives a lender a security interest in them, are a burden on commerce and contrary to the public interest. A payment instrument that is dishonored does not count as payment, so a bounced check does not change your position. Two limits are worth checking early: the trust provisions do not apply to transactions between a cooperative association and its members (7 C.F.R. § 46.46(e)(4)), and a buyer purchasing solely for sale at retail sits outside the statute’s definition of a dealer until the invoice cost of its produce purchases in a calendar year exceeds $230,000 (7 U.S.C. § 499a(b)). How a preserved trust claim resolves against a particular lender’s security interest in the same collateral is litigated in federal district court under § 499e(c)(5), and that is a question for counsel rather than for us.
Thirty calendar days, running from the earliest of three events under 7 U.S.C. § 499e(c)(3): the payment deadline prescribed by the Secretary’s regulations, a different payment deadline the parties expressly agreed to in writing before entering into the transaction, or the day you receive notice that a payment instrument promptly presented for payment was dishonored. Because the regulatory default for a buyer is ten days after the day the produce is accepted (7 C.F.R. § 46.2(aa)(5)), on a straightforward unpaid load the written notice is due about forty days after acceptance rather than thirty — which is exactly the arithmetic that catches people out. Calendar days are every day of the week, including Saturdays, Sundays, and holidays, and if the thirtieth day lands on a weekend or holiday, 7 C.F.R. § 46.46(a)(4) moves the deadline to the next day on which there is postal delivery. Miss it and § 499e(c)(3) says you lose the benefits of the trust: the debt survives, the trust does not.
It can, but two things have to be true. 7 U.S.C. § 499e(c)(4) makes the ordinary and usual billing or invoice statement an alternative route to notice, and it is open to a licensee — so a seller who is not licensed under PACA has to use the written-notice route in § 499e(c)(3) instead. The invoice given to the buyer must also carry the trust statement the statute and 7 C.F.R. § 46.46(f)(3)(i) prescribe, which begins “The perishable agricultural commodities listed on this invoice are sold subject to the statutory trust” and goes on to reserve the seller’s trust claim over the commodities, the inventories of food or other products derived from them, and the receivables or proceeds of their sale until full payment is received. If your terms differ from the prompt-payment times in the regulations, 7 C.F.R. § 46.46(f)(3)(ii) requires those terms to appear on the invoice, and only where the parties expressly agreed to them in writing before the affected transactions. Send a copy of the invoice form itself with the account — on these files it matters as much as the balance.
Probably not, and this is the most expensive mistake on produce accounts. 7 C.F.R. § 46.46(e)(2) sets the maximum payment time a seller, supplier, or agent can agree to and still qualify for coverage under the trust at thirty days after receipt and acceptance of the commodities, so terms beyond that do not shorten the remedy — they put the shipment outside it. Any agreement to payment times different from the regulatory default has to be reduced to writing before the transaction with a copy kept in each party’s records, and disclosed on invoices, accountings, and other documents relating to the transaction (7 C.F.R. § 46.46(e)(1)); under 7 C.F.R. § 46.2(aa)(11) the party claiming such an agreement exists carries the burden of proving it. Whether a particular arrangement crossed that line is a legal question, and one of the first things counsel looks at, so send us the credit application and whatever document your terms live in rather than just the number.
Usually yes, because the trust is a remedy and not the debt. What is lost is the trust position; what remains is an ordinary commercial claim for the price, which is the bulk of what we work. In Texas, Tex. Civ. Prac. & Rem. Code § 16.004(a)(3) sets a four-year limitations period for an action on a debt, and § 16.004(c) covers an action on an open or stated account — with the cause of action on an open account accruing on the day the dealings in which the parties were interested together cease, rather than on the invoice date, so an account with recent activity often has more runway than its oldest invoice suggests. There is also a separate federal route worth asking counsel about: under 7 U.S.C. § 499f(a)(1), a person complaining of a violation of § 499b by a commission merchant, dealer, or broker may apply to the Secretary by petition at any time within nine months after the cause of action accrues. Send the acceptance dates with the file regardless — they decide which of those routes is open.
No, and the lines are sharp: the PACA trust runs only to perishable agricultural commodities, which 7 U.S.C. § 499a(b)(4) defines as fresh fruits and fresh vegetables of every kind and character, whether or not frozen or packed in ice, together with cherries in brine as the Secretary defines it, so dairy, seafood, and bakery goods sit outside it entirely. Meat and poultry have their own trusts on their own clocks: 7 U.S.C. § 196 holds livestock bought in cash sales, and the inventories, receivables, and proceeds of meat, meat food products, and livestock products derived from them, in trust for unpaid cash sellers, preserved by written notice to the packer that is also filed with the Secretary within thirty days of the final date for payment under 7 U.S.C. § 228b — payment there being due before the close of the next business day following the purchase of the livestock and transfer of possession — or within fifteen business days after notice that a promptly presented payment instrument was dishonored. 7 U.S.C. § 197 does the same for live poultry dealers, for unpaid cash sellers and poultry growers, keyed to the payment date in 7 U.S.C. § 228b-1. Both carry size thresholds: a packer whose average annual livestock purchases do not exceed $500,000 falls outside § 196, and a live poultry dealer whose average annual sales of live poultry, or average annual value of live poultry obtained by purchase or under poultry growing arrangements, do not exceed $100,000 falls outside § 197. Tell us what you shipped and who bought it, and we will tell you which clock the file is on.
That is a different remedy with a shorter clock, and it is worth raising in the same week as the trust question. Tex. Bus. & Com. Code § 2.702(b) lets a seller who discovers that the buyer has received goods on credit while insolvent reclaim them on demand made within ten days after receipt, and that ten-day limitation does not apply where a misrepresentation of solvency was made to that particular seller in writing within three months before delivery. Under § 2.702(c) the right is subject to the rights of a buyer in ordinary course or other good faith purchaser or lien creditor, and successful reclamation excludes all other remedies with respect to those goods — which on produce that has already been resold or processed usually means there is nothing left to reclaim. On fresh fruits and vegetables the trust is the stronger of the two and reaches the proceeds rather than the pallets, and the two deadlines run at the same time. Whether either applies to your shipment is a legal question for counsel.
The notice is yours to give. 7 U.S.C. § 499e(c)(3) puts it on the unpaid supplier, seller, or agent, and we are a collection agency rather than a law firm — we do not file suit, file liens, or give legal advice — so what we do is check the content against the fields 7 C.F.R. § 46.46(f)(1) requires before it goes out, and tell you plainly when the right next call is to your own counsel. From there we work the account, and anything that warrants a trust action goes to licensed collection attorneys in the buyer’s own jurisdiction, nationwide through a network of licensed collection attorneys. The fee is agreed before you place anything, and court costs on anything filed are reviewed with you first. You get a named person and a direct line, and anything collected is remitted with a statement of the amount collected and the agreed fee.
Tell us what you're owed and we'll tell you exactly how we'd go after it. The review is free, and you pay nothing unless we collect.
Free and confidential · No upfront cost · You pay only if we collect
