A Buyer Paying Late? You Have 30 Days to Protect Your PACA Claim

By the Thombar team

tl;dr: If a produce buyer pays you late, federal law can put you ahead of the buyer’s bank, but only if you act on time. Keep payment terms at 30 days or less and in writing, and send written notice within 30 days of the day payment was due.

What’s happening

USDA keeps sanctioning produce buyers that don’t pay. In September, Hoodline reported that Sunbelt Produce Distributors, a wholesaler formerly based at the Atlanta State Farmers Market, is barred from the produce trade until March 13, 2027, after failing to pay 20 sellers $1,922,775 for produce bought from February 2023 to February 2024. In August, USDA suspended the license of Sorbatto Fresh LLC of Wapato, Wash., for failing to pay a $121,650 award to an Oregon seller.

A sanction does not pay the seller. What protects an unpaid seller is the PACA trust. Under the Perishable Agricultural Commodities Act, a buyer holds the produce, products made from it and the money from selling it in trust until sellers are paid in full. USDA says the trust gives sellers “priority status” if a buyer becomes insolvent or files for bankruptcy. It is not automatic. USDA’s rules:

• Payment terms cannot exceed 30 days from acceptance of the product.
• Any terms other than PACA prompt payment terms (usually 10 days) must be agreed in writing before the sale.
• Sellers without a PACA license preserve their rights with a written “notice of intent to preserve trust benefits,” sent within 30 days from the day payment was due.

What it means for your margin and cash

The amounts are real money. Spread evenly, the Sunbelt debt works out to $96,138.75 per seller.

The clock is short. For example, on prompt payment terms a load accepted Nov. 2 is due Nov. 12, and the last day to send notice is Dec. 12. That is 40 days after the produce arrived. A grower who waits to see whether the check shows up can lose the trust claim and end up in line with every other unsecured creditor.

Loose terms put the claim at risk. USDA requires any terms other than prompt payment to be agreed in writing before the sale and capped at 30 days. A handshake deal for “pay when it sells,” or written terms longer than 30 days, does not fit those rules.

One thing to do this week

Pull your open receivables and sort them by buyer and due date. For every produce invoice that is past due, send a written notice of intent to preserve trust benefits now. USDA says it must include:

• The names and addresses of you and the buyer
• The transaction date and the commodity
• The invoice price and the payment terms
• The amount past due and unpaid

Keep a copy and proof it was sent. For future sales, put payment terms in writing before you ship, and keep them at 30 days or less. If a buyer still won’t pay, you can file an informal complaint with USDA’s PACA Division through the ePACA portal with a $100 filing fee; the deadline is nine months from when payment was due. For a large claim or a buyer in bankruptcy, talk to an attorney who handles PACA cases. This is general information, not legal advice.

How Thombar helps

Thombar watches your open receivables daily and flags buyer payment risk, so a late invoice shows up while the 30-day notice window is still open. It also reads your season contracts, so you know what payment terms you actually agreed to.

Sources

• USDA Agricultural Marketing Service: PACA Trust
• USDA Agricultural Marketing Service: PACA Dispute Resolution
• Hoodline: Forest Park Produce Firm Banned Through 2027 Over $1.9M in Unpaid Bills (Sept. 12, 2026)
• USDA: USDA Restricts PACA Violator in Washington from Operating in the Produce Industry (Aug. 19, 2026)
• Warner Norcross + Judd: Farmers and Agribusinesses, Protect Your Rights Under PACA