Grain Dealers' Licensing Details & FAQ
Expires: Expiration is dependent on the fiscal year end of the company
Fee: Varies - See below
Jeff Haarer, 517-284-5642
Forms: Grain Dealer Licensing Forms
Who Needs a License?
If you are engaged in the business of receiving, buying, exchanging, selling or storing farm produce and you do not fall within an exception, you are considered to be a grain dealer and you must obtain a license from the Michigan Department of Agriculture & Rural Development (MDARD).
Who does not need a license?
- A grower or producer who sells farm produce that the grower or producer actually produces.
- A person who buys farm produce, pursuant to a cash sale, as a feeder of the person's own livestock or poultry.
- A person who handled less than 30,000 bushels of farm produce from producers in the prior or current fiscal period, buying farm produce in a cash sale.
- A person who contracts for land or services to produce seed for sowing or propagation
- A person who purchases farm produce from other than a grower or producer pursuant to a cash sale.
Note: Exceptions are not available if person is required to offer warehouse receipts, price later agreements, or if person takes title prior to payment to farm produce of a producer or grower. To qualify for an exception the person must engage solely in the exceptions listed above.
What fees are required in order to have a Grain Dealers' license in
For each receiving point that has a total bushel capacity of:
100,000 or less........................$500.00
More than 100,001 and 200,000 or less..$625.00
More than 200,001 and 300,000 or less..$750.00
More than 300,001 and 400,000 or less..$875.00
More than 400,000......................$1,000.00
Each additional truck..................$200.00
How do I apply for a new Grain Dealers License?
Complete the application form found below:
If I have sent in an application, when can I begin operating at a grain dealer?
Upon receipt of grain dealers license. Licenses are processed within 30 days from receipt.
When do my Grain Dealers Licenses expire?
License expiration date is dependent on the fiscal year end of the company. They are normally a year in length.
Is there anything I can do to avoid having my license renewal delayed?
Applications must be complete with a financial statement, bond, and insurance information that comply with statutory requirements listed in the license requirements section. Renewals must be submitted at least 30 days prior to the expiration date.
What are the requirements to obtain a grain dealers license?
License applications must be submitted 30 days prior to the date needed or the license expiration date. Each application must be accompanied by a financial statement. The financial statement must be prepared in accordance with generally accepted accounting principles and not less in scope than a review. A Certified Public Accountant must prepare the financial statement. Information required includes a balance sheet, income statement, and notes and disclosures.
When and how should a temporary facility be reported?
Each temporary facility need only be reported once annually.
If temporary facilities are being used at time of licensing, report location and temporary capacity in Section 8 and total of temporary and permanent capacities in Section 9 of the license application and remit the appropriate fee.
If temporary facilities are used during the license year, and were not reported on the license application, report the location on the Daily Position Reporting (DPR) form and remit additional fee (if required) with the Daily Position Report (DPR) form. If not previously submitted, include a copy of the lease agreement and bin charts, if any, for the temporary facility.
What are the bond requirements for a grain dealer facility?
For a grain dealer who fails to meet any of the allowable net asset requirements under subsection (3) of Sec 3 of the Grain Dealers Act, P.A. 141 of 1939, as amended, the department may issue or renew the license if the grain dealer provides the department with a negotiable bond issued by a surety authorized to conduct business in this state, or proof of establishment of a restricted account in a financial institution that conducts business in this state, acceptable to the department and of which the department is the sole beneficiary, that is in an amount equal to the amount by which the grain dealer's allowable net assets failed to meet the allowable net asset requirement applicable under subsection (3). Bond form GD-123 is available here. The bond shall show the address of each original grain dealer's bond (if required) and must accompany the license application.
Is insurance required for a grain dealer?
Insurance is required by a grain dealer on all farm produce, stored through an authorized insurer, against loss by fire, explosion, lightning, or windstorm to the extent of full market value. Failure to do so is just cause for revocation. The average market value on date of loss is basis for settlement.
What are the net worth requirements to be a grain dealer?
A grain dealer shall not be issued a license unless one of the following is met:
- The grain dealer has allowable net assets of more than $1,000,000.
- The grain dealer has allowable net assets of $50,000 or more and handled 500,000 or fewer bushels of farm produce in the grain dealer's most recent fiscal year
- The grain dealer has allowable net assets of $50,000 or more and the allowable net assets equal or exceed the product of 10 cents multiplied by the number of bushels of farm produce handled by the grain dealer in the grain dealer's most recent completed fiscal year
What grain transaction forms must be submitted with the license application?
Attach to the application one copy of the scale ticket, warehouse receipt, price later agreement or other forms proposed to be used in grain transactions. Retain one copy for your files. If all current forms are currently on file with the Department, no submission is necessary.
When must you submit the Daily Position Reporting forms?
During the first 10 days of each month, all licensees are required to submit a Daily Position Report (DPR) for the previous month. Licensees may use the Department approved Daily Position Reporting forms available by contact the Producer Security Services Section of the Michigan Department of Agriculture & Rural Development. Reports must be submitted whether or not there is any farm produce activity during the month. Failure to submit monthly DPR forms on a timely basis may result in a fine, suspension, or revocation of the grain dealer's license.
What should I expect if there is a violation noted during audit?
An audit report will be provided following the audit and a follow-up letter will be sent from the Michigan Department of Agriculture & Rural Development. The elevator will be required to show compliance with violations or may be subject to administrative fines and/or license revocation and suspension.
What should I do if there are changes in company ownership, name, or address?
Statute requires reporting changes within one business day prior to the changes occurring.
New license applications may be required for substantial ownership changes including:
- The licensee is a party to a merger, consolidation, conversion, or similar transaction. The department may decide not to revoke the license if the successor to the licensee is licensed under this act and executes a successor's agreement acceptable to the department.
- Fifty percent or more of the shares, other than publicly traded shares, or other ownership interests in the licensee are sold, exchanged, or otherwise transferred. The department may decide not to revoke the license if the transferee is licensed under this act and executes a successor's agreement acceptable to the department.
- Fifty percent or more of the property and assets of the licensee are sold, leased, exchanged, or otherwise transferred. The department may waive this requirement if the transferee is licensed under this act and executes a successor's agreement acceptable to the department.
- If the grain dealer has 100 or more stockholders, members, partners, or owners, as applicable, more than 1/2 of the grain dealer's board of directors or other governing body or board are replaced with different individuals.
- The name of the grain dealer is changed.