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Grain Licensing
The Grain Licensing Program licenses both grain buyers and grain warehouses and is designed to help protect grain sellers and depositors from monetary loss if they do not receive payment for grain sold or if grain stored is damaged or lost.
A complete list of Minnesota grain buyers and warehouses can be found in our online database of licensed grain buyers and grain elevators.
There are two types of grain licenses:
- Grain Buyer License: Required by anyone buying grain in Minnesota with the purpose of reselling the grain or products made from the grain.
- This license is required for producer purchases, as well as purchases made from other grain buyers and sellers.
- This license is required for all purchases that take place within Minnesota or where the title to the grain transfers in Minnesota, that means any purchase at a Minnesota facility, on farm, on contract where title transfers at a MN destination, etc.
- Grain Buy & Store License: Required to operate a grain warehouse that stores grain for compensation.
You do not need to be licensed if you sell the grain you grow, buy seed grain for crop production only, or purchase grain as feed for your own livestock or poultry.
Definition of Grain:
"Grain" means all products commonly referred to as grain, including wheat, corn, oats, barley, rye, rice, soybeans, emmer, sorghum, triticale, millet, pulses, dry edible beans, sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe, sesame seed, and other products ordinarily stored in grain warehouses.
Applying for a license
To apply for a license, you will need to complete the below steps, if you have questions please contact our office.
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Submit an application along with the required payments.
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Obtain and submit a $100,000 Minnesota grain bond
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Contact a CPA to prepare financials that meet financial requirements.
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If storing grain, you must submit a schedule of all charges relating to the storage of grain using the form on this page.
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If storing grain, you must provide evidence of insurance for loss of stored grain due to fire, windstorm, and extended coverage risks.
Important Notice: New License and Permit Surcharge
As part of our ongoing efforts to improve our services, the MDA is introducing a surcharge (MINN. STAT. 17.033) on certain licenses and permits. This surcharge is an application processing charge that will be added to applications and renewals for 2025 and beyond. The surcharge will be calculated as 5% of the license or permit fee, with a minimum charge of $5. The surcharge is supporting the modernization of our technology systems, which will provide better online services and more efficient processing of applications. The collected funds will be dedicated to upgrading our electronic systems, making it easier for you to interact with us and access the services you need.
A grain buyer's license must be purchased for each location. Only one storage license is required if there is one owner and operator for multiple storage facilities within the same city.
The licensing period is July 1st - June 30th with an annual renewal. A renewal application will be mailed to you in May and it must be returned by July 1 or late fees will apply.
Bonds
An applicant who has not been licensed to buy or store grain in Minnesota in the previous licensing period must file a $100,000 MN Grain Bond. A grain bond must remain in effect for the first three years of the license. The Commissioner may also require additional bonds based on financial statements.
You may be exempt from the bond if you meet ALL THREE of the following criteria:
- You purchase less than $1 million in grain each year,
- you pay for all grain with cash (bills and coins), a certified check, a cashier's check, or a postal, bank, or express money order (this DOES NOT include regular checks, ACH, or wire payments), and
- you pay immediately after delivery.
If you meet all three of these criteria, please contact our office for an exemption form. Exemptions are not automatic they must be submitted to our office at application or annually at renewal. MDA inspectors will also verify that all exemption requirements are being followed during annual inspections.
You should be able to obtain a bond through your bank or insurance carrier.
The bond helps to reimburse the indemnity fund if payments are made to producers due to a breach of contract.
Grain Purchases in Minnesota
There are two types of grain purchases recognized in Minnesota, they are called Cash Sales and Voluntary Extension of Credit Contract (VECC) purchases.
Cash Sales: you must pay by cash, check, mail, or wire no later than the close of business on the next day after the sale of the shipment, or within 48 hours after the sale of the shipment, or whichever is later.
VECC: any purchase where payment for grain is made later than 48 hours after the sale of the shipment.
- If you purchase grain on cash sale that you do not pay within the time frame stated above, the purchase automatically becomes a voluntary extension of credit and must be put on contract.
- If purchasing grain by voluntary extension of credit, you must document the sale in writing using the proper format within 30 days of delivery. All voluntary extension of credit contracts must include the following statement in not less than ten-point, all-capital type, framed in a box with space provided for the seller's signature:
"THIS CONTRACT CONSTITUTES A VOLUNTARY EXTENSION OF CREDIT. THIS CONTRACT MAY NOT BE COVERED COMPLETELY BY THE GRAIN INDEMNITY ACCOUNT."
- If you purchase grain by voluntary extension of credit, you must at all times maintain grain, rights in grain, or proceeds from the sale of grain totaling 90 percent of the grain buyers' obligation for grain purchased by voluntary extension of credit contracts.
- You must maintain accurate books and records, including a record of grain warehouse receipts if storing grain, and secure them in a safe place.
- If storing grain, you must deliver grain within 48 hours of demand for such grain.
- If storing grain, a statement of all charges relating to the storage must be posted at each licensed location and must be clearly visible to the public.
- For more information, please use the links on this page to familiarize yourself with the requirements in Statutes 223 and 232.
FAQ: Exams/Inspections for Grain License Holders
All license holders are required to undergo one examination each year.
Grain license holders must maintain detailed records of:
- Copies of scale tickets, assembly(settlement) information, as well as check and ACH documentation.
- Voluntary extension of credit contracts.
- Evidence of grain, rights in grain, and proceeds from the sale of grain for inspection.
- Any other relevant information related to grain purchase.
- Warehouses are required to maintain accurate records for all warehoused grain, including:
- A daily log of each commodity received and shipped.
- The balance remaining in the warehouse at the end of each business day.
- A listing of all unissued grain warehouse receipts in the operator's possession.
- Records of all outstanding grain warehouse receipts.
- Records of all grain warehouse receipts that have been returned for cancellation.
- Any other relevant information related to grain storage.
- Copies of grain warehouse receipts or other documents must be kept for a minimum of three years.
In Minnesota, examiners conduct an onsite review, which includes but is not limited to:
- Auditing records.
- Physically measuring grain bins and facilities to determine total capacities, shortages in storage, obligations, open storage accounts, contracts, insurance policies, and safety issues.
For out-of-state locations, the Minnesota Department of Agriculture (MDA) will send an order for records to complete an offsite review.
Yes, federally licensed grain warehouses are exempt from the state inspection requirement if they have had an exam conducted by the USDA during the license period.
