Packers and Stockyards bonds are required by the U.S. Department of Agriculture. These bonds ensure ethical business practices, regulatory compliance, and proper handling of funds. The requirement stems from the Packers and Stockyards Act of 1921. The bond covers those who sell on commission and ensures that they pay the lawful amount. It also covers buyers and ensures that they pay the entire purchase price. It also covers any intermediaries who oversee livestock transactions as well as packers.