How is the Iowa Grain Warehouse Bond amount calculated?
The bond amount is based on your warehouse's storage capacity and net worth. Operators must maintain a net worth of at least 25 cents per bushel of warehouse capacity. If your net worth is deficient, you must file a deficiency bond at $2,000 per $1,000 (or fraction) of net worth deficiency. For non-bulk agricultural products, minimum bond amounts start at $3,000 for storage values under $20,000 and increase progressively: $10,000 for storage values of $20,000-$50,000, and $20,000 plus $1,000 per $5,000 excess for values over $50,000.
What are the cancellation requirements for the Iowa Grain Warehouse Bond?
The bond cannot be canceled without advance notice to the Iowa Department of Agriculture and Land Stewardship. Under Iowa Code Chapter 203C, the surety company must provide 120 days' notice for standard warehouse bonds (or 90 days for bulk grain bonds) before cancellation becomes effective. If the bond is canceled and not replaced, the warehouse operator's license will be suspended until proper financial security is restored.
Who is protected by the Iowa Grain Warehouse Bond?
The bond protects farmers, grain depositors, and anyone who stores bulk grain or agricultural products at the licensed warehouse. If the warehouse operator fails to return stored grain, becomes insolvent, or doesn't cover grain shortages within 30 days, depositors can file a claim against the bond to recover their losses. The bond works alongside the Iowa Grain Indemnity Fund to provide financial protection for depositors.
