Iowa Grain Dealer Bond

If your current assets fall below required levels, the Iowa Department of Agriculture will notify you of the deficiency. You have 30 days to either correct the financial shortfall or file a surety bond (or irrevocable letter of credit) covering the deficiency. If you don't comply within 30 days, your grain dealer license will be suspended. The bond ensures grain producers are protected even when your business faces financial challenges.

You need this bond if you're a licensed grain dealer in Iowa who buys, receives, exchanges, or stores grain from producers and your financial ratios fall below state minimums. Class 1 licensees need minimum net worth of $75,000 and current assets at least 100% of current liabilities. Class 2 licensees need $37,500 net worth with the same asset ratio. If you don't meet these thresholds, you must file a bond. Additionally, any dealer issuing credit-sale contracts must file a $100,000 bond.

The bond amount is based on your financial ratios and grain volume. If you're a Class 1 or Class 2 licensee who doesn't meet minimum financial requirements (net worth and current asset ratios), the bond covers the shortfall at $2,000 per $1,000 of deficiency, capped at $1 million. For grain dealers issuing credit-sale contracts, a fixed $100,000 bond is required. The Iowa Department of Agriculture determines the exact amount based on your financial statements.