Pipeline Foods Bankruptcy Information
The MDA is providing information and resources to producers impacted by the bankruptcy filing of Pipeline Foods, LLC. Find current information here.
There are new requirements and changes you need to follow to get your Grain Buyer and Grain Buy & Store licenses from the Minnesota Department of Agriculture. Changes to the law took effect on July 1, 2020 and were updated June 27, 2022. They focus on financial reporting, contracts, exams, and bonding. You can find details here.
What are the different types of licenses?
- Grain Buyer License: Required by anyone buying grain in Minnesota with the purpose of reselling the grain or products made from the grain. In addition to a license, a bond must be acquired. Bonds requirements range from $10,000 to $150,000 and are based on the dollar amount of the buyers annual grain purchases.
- Grain Buy & Store License: Required to operate a grain warehouse that stores grain for compensation. Grain warehouses must acquire a grain bond which provides reimbursement to depositors experiencing damage or other grain loss. Bonds range from $10,000 to $500,000 for storage licenses.
- All license holders are required to have one examination each year. Examiners provide an onsite review including an audit of records and a physical measurement of storage bins and facilities to identify total capacities, shortages in storage, over obligations, open storage accounts, contracts, insurance policies and safety issues. Federally licensed grain warehouses are exempt from this requirement if they have had an exam conducted by the USDA during the license period.
You do not need to be licensed if you sell your own grain, buy only seed grain for crop production, or purchase grain as feed for your own livestock or poultry.
Applying for a license
- Submit an application along with the required payment
- Obtain the required bond
- Submit a voided Warehouse Receipt or Scale Ticket. These forms must be printed in duplicate, consecutively pre-numbered, and show the name and location of the elevator.
- If storing grain you must file a tariff or schedule of all charges relating to the storage of grain.
- If storing grain, you must provide evidence of insurance for any loss of stored grain due to fire, windstorm, and extended coverage risks.
What if I have multiple facilities?
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 before your license expires and it must be returned by July 1st or late fees will apply. If you think your renewal may have been lost in the mail please contact us, we will gladly resend the renewal application. Please do not print out and send a new application from this page as it may cause a delay in receiving your license!
What are my responsibilities as a licensed entity?
- For cash sales, you must pay 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.
- If purchasing grain by voluntary extension of credit, you must document the sale in writing, using the proper format and within the time periods indicated by law.
- 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.
- 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.
How do I know if a grain buyer or warehouse is licensed and bonded?
Contact us at the number listed on this page or check our online list of licensed grain buyers and grain elevators.
How do I get a bond?
You may be able to obtain a bond through your bank or insurance carrier.
What does the bond cover?
The bond provides compensation to sellers of grain against the breach of contract for cash sales or the breach of a grain storage contract.
Can I use something other than a bond for security?
In lieu of a bond, you can provide an irrevocable bank letter of credit of equal value. If you plan to provide an irrevocable letter of credit you must use the PDF irrevocable letter of credit template supplied on this page; other document formats are available by calling our office.
Grain Bond Claims
A seller claiming to be damaged by a breach of a contract for the purchase of grain by a licensed grain buyer or a licensed public grain warehouse operator may file a written claim with the commissioner. The claim must state the facts constituting the claim. The claim must be filed with the commissioner within 180 days of the breach of the contract. The Grain Bond Claim form can be found in the Forms & Resources section of this page.
What do I include in a claim?
All claims must be in writing, must state the facts upon which the claim is based, must include any supporting evidence, and must be signed by the claimant. The supporting evidence may consist of, but is not limited to, a purchase agreement, a scale ticket, a grain purchase receipt, a check indicating insufficient funds, a warehouse receipt, or an assembly sheet.
Where do I send a claim?
All claims must be filed with the:
Minnesota Department of Agriculture
Fruit Vegetable & Grain Unit
625 North Robert St.
St Paul, MN 55155.