202B.201 Prohibited operations and activities — exceptions.

1. Except as provided in subsections 2 and 3, and section 202B.202, all of the following apply:

a. For cattle, a processor shall not own, control, or operate a cattle operation in this state.

b. For swine, a processor shall not do any of the following:

(1) (a) (i) Directly or indirectly own, control, or operate a swine operation in this state.

(ii) Finance a swine operation in this state or finance a person who directly or indirectly contracts for the care and feeding of swine in this state.

(iii) Obtain a benefit of production associated with feeding or otherwise maintaining swine, by directly or indirectly assuming a morbidity or mortality production risk, if the swine are fed or otherwise maintained as part of a swine operation in this state or by a person who contracts for the care and feeding of swine in this state.

(iv) Directly or indirectly receive the net revenue derived from a swine operation in this state or from a person who contracts for the care and feeding of swine in this state.

(b) For purposes of subparagraph division (a), subparagraph subdivisions (i) and (ii), both of the following apply:

(i) “Finance” means an action by a processor to directly or indirectly loan money or to guarantee or otherwise act as a surety.

(ii) “Finance” or “control” does not include executing a contract for the purchase of swine by a processor, including but not limited to a contract that contains an unsecured ledger balance or other price risk sharing arrangement. “Finance” also does not include providing an unsecured open account or an unsecured loan, if the unsecured open account or unsecured loan is used for the purchase of feed for the swine and the outstanding amount due by the debtor does not exceed five hundred thousand dollars. However, the outstanding amount due to support a single swine operation shall not exceed two hundred fifty thousand dollars.

(2) Directly or indirectly contract for the care and feeding of swine in this state.

2. Subsection 1 shall not apply to a swine producer who holds a threshold interest in a qualified processor in the manner provided in section 202B.102, if all of the following apply:

a. The swine producer’s threshold interest in the qualified processor is not more than ten percent.

b. The swine producer is not a processor. However, this paragraph does not apply to a swine producer deemed to be a processor solely because the swine producer holds a threshold interest in the qualified processor as otherwise allowed under this subsection or because the swine producer holds an executive position in the qualified processor or owes the qualified processor a fiduciary duty.

3. This section shall not preclude a processor from doing any of the following:

a. Contracting for the purchase of cattle or swine, provided that where the contract sets a date for delivery which is more than twenty days after the making of the contract, the contract shall do one of the following:

(1) Specify a calendar day for delivery of the cattle or swine.

(2) Specify the month for the delivery, and shall allow the farmer to set the week for the delivery within such month and the processor to set the date for delivery within such week.

b. Carrying on legitimate research, educational, or demonstration activities.

c. Owning and operating facilities to provide normal care and feeding of cattle or swine for a period not to exceed ten days immediately prior to slaughter, or for a longer period in an emergency.

[C77, 79, 81, §172C.2]

88 Acts, ch 1191, §3; 92 Acts, ch 1151, §5

C93, §9H.2

93 Acts, ch 39, §5, 6; 2000 Acts, ch 1048, §2, 3; 2002 Acts, ch 1095, §4, 10 – 12; 2003 Acts, ch 115, §5, 16, 19

CS2003, §202B.201

2009 Acts, ch 41, §79

Referred to in §202B.302, 202B.401