Kentucky Warehouseman and Grain Dealers Must Post Surety Bond

grain dealers

All grain dealers in Kentucky will be required to post a surety bond following the passage of Senate Bill 182. The bill removes exceptions that allowed some grain dealers to avoid a surety bond requirement.

Kentucky requires separate surety bonds of both grain dealers—buyers and sellers of grain for resale, milling or processing—and warehousemen—owners, controllers, operators or managers of public grain warehouses. Previous law exempted grain dealers who are also warehousemen from purchasing a separate surety bond, as well as from licensing fees. It also exempted grain storage locations that were bonded and licensed under federal law from the provisions of Chapter 251 of the Kentucky Revised Statutes.

SB 182 deletes these exemptions, requiring warehousemen to obtain both a grain dealer and a warehouseman bond and pay applicable licensing fees. Grain storage locations bonded and licensed by the federal government will now also be required to adhere to KRS 251.

Grain dealer locations’ surety bond amount is determined by the amount of grain that was purchased in the previous year. If the dealer has been in business for less than one year, it should be based on an estimated purchase amount. The bond should be 10% of the total dollar amount spent on grain purchases, rounded to the nearest $1,000. The bond should be no less than $25,000 and no more than $1 million. Warehousemen’s bond amount should be equal to $0.25 per bushel of the total maximum bushel capacity of the warehouse or $25,000, whichever is greater. Their bond should also not exceed $1 million.

Grain dealer locations and warehouseman must be licensed before conducting business. Licensed warehouseman can be grain dealers on the same license, however a licensed grain dealer would need to obtain a warehouseman license. Grain dealers and warehouseman are licensed by the Kentucky Department of Agriculture. Licensing fees vary depending on the volume of grain handled annually.

Contact the Department of Agriculture with questions about your surety bond amount and to verify the kind of license you should apply for. The team can help you get bonded in Kentucky quickly, easily and accurately.


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About the Author

Melanie Baravik
Melanie is a senior at the University of Missouri - Columbia studying English with an emphasis in creative writing. She is a member of the marketing department and outreach team for, a leading provider of online bonding for clients nationwide.