Texas Grain & Feed association - PowerPoint Presentation

1. Texas Grain & Feed associationUSWA Warehousing Principles, requirements and feesFarm Service Agency – Commodity Operations

2. Farm Service Agency – Commodity Operations100th Anniversary Created in 1916PurposeTo Stabilize Agricultural markets and facilitate commerce To Establish a system of public commodity warehouses USWA Warehousing Principles, Requirements and Fees

3. Farm Service Agency – Commodity OperationsScope  Voluntary Participation and allows for licensing across State Lines Nationwide 2,600 Grain Elevators – 5.4 billion bushels federally licensed – 55% Texas 166 Grain Elevators – 35 individual licenses – 400 million bushels – 63%Cotton, Dry Edible Beans, Cottonseed, Nuts, Honey, Wool, TobaccoUSWA Warehousing Principles, Requirements and Fees

4. Farm Service Agency – Commodity OperationsOverview  USWA relationship with Commodity Credit CorporationPrincipals of the Licensing Program (including requirements)USWA Licensing Fees USWA Warehousing Principles, Requirements and Fees

5. Farm Service Agency – Commodity OperationsUSWA relationship with Commodity Credit Corporation  CCC created by Congress in 1933Purpose included development of system of farm income support and commodity price supportEvolved into a major tool within US Farm Bills and Farm Policy to influence the commodity industry and provide food security USWA Warehousing Principles, Requirements and Fees

6. Farm Service Agency – Commodity OperationsUSWA relationship with Commodity Credit Corporation  Uniform Grain and Rice Storage Agreement:Contract between USDA/CCC and commercial grain elevators Allows elevators to participate in USDA farm and commodity programsAllows for warehouse examinations be performed on approved elevatorsRequires that approved warehouses comply with warehouse licensing laws USWA Warehousing Principles, Requirements and Fees

7. Farm Service Agency – Commodity OperationsPrinciples  Financial IntegrityDepositor ProtectionsAdherence to Rules and RegulationsThe Warehouse Examination ProcessWarehouse Receipt Validation USWA Warehousing Principles, Requirements and Fees

8. Farm Service Agency – Commodity Operations Financial IntegrityAudited Financial StatementMust be consistent with Licensed Warehouse Operator Must have a minimum allowable net worth of $200,000$.25 per bushel net worth1 to 1 working capital ratio USWA Warehousing Principles, Requirements and Fees

9. Farm Service Agency – Commodity Operations Depositor ProtectionsSurety Bond, Irrevocable Letter of Credit, US Treasury NotesMaximum Bond amount per state is $500,000Additional bond amounts required for financial deficiencies USWA Warehousing Principles, Requirements and Fees

10. Farm Service Agency – Commodity Operations Rules and RegulationsMaintain quantity and quality of grain in store to cover obligationsMaintain physical structures of warehouse and operating systemsProvide Safe bin Access USWA Warehousing Principles, Requirements and Fees

11. Farm Service Agency – Commodity Operations Rules and RegulationsMaintain system of recordsMaintain Grain Stock Insurance CoveragePosting of Public TariffNon Discrimination practicesLicense to Inspect/Weigh/Grade Commodity USWA Warehousing Principles, Requirements and Fees

12. Farm Service Agency – Commodity Operations Warehouse Examination ProgramVerifies that warehouse meets USWA operating requirements (rules and regulations)Determines warehouse capacities Provides for routine examinations on an unannounced basis Documents that sufficient quantity and quality are in store to cover storage obligations  USWA Warehousing Principles, Requirements and Fees

13. Farm Service Agency – Commodity Operations Warehouse Examination ProgramReviews warehouse records for accuracy and being current  Reviews operating practices of warehouse for compliance with USWA  Allows for corrective action request or memorandum (WA-125)  USWA Warehousing Principles, Requirements and Fees

14. Farm Service Agency – Commodity Operations Warehouse ReceiptDocument of title that can be negotiable or non-negotiableElectronic or Paper series controlled by USWACommon Uses: -Issued to Producers as evidence of ownership-Pledge for USDA/CCC price support loan-Issued to bank for collateral-Accepted by Boards of Trade as contract delivery mechanism  USWA Warehousing Principles, Requirements and Fees

15. Farm Service Agency – Commodity OperationsWarehouse Licensing FeesAnnual User FeeLicense Action FeeService License FeeInspection Fee  USWA Warehousing Principles, Requirements and Fees

16. Farm Service Agency – Commodity Operations http://www.fsa.usda.gov/Internet/FSA_File/2006feetablegrain.pdfUSWA Warehousing Principles, Requirements and Fees

17. Farm Service Agency – Commodity OperationsWarehouse Licensing Fees (cont.)Annual User FeeCalculated by each functional unit/locationBased on each location’s licensed bushel capacityYour annual user fee is due on the anniversary of your original license date USDA will mail out the invoice for the annual user fee approximately 1 month before it is due.This user fee covers the cost of the annual examination of your facilities including inventory. USWA Warehousing Principles, Requirements and Fees

18. Farm Service Agency – Commodity OperationsWarehouse Licensing Fees (cont.)2. License Action FeeOnly assessed during amendment/original and emergency storage requests  USWA Warehousing Principles, Requirements and Fees

19. Farm Service Agency – Commodity OperationsWarehouse Licensing Fees (cont.)3. Service License FeeInspector/weigher licenses and are $35 each and no annual renewal fee.  2 ways to submit applications:1) Paper application mailed to Kansas City office with the $35 fee included.2) eLicensing – pay online and submit applications online USWA Warehousing Principles, Requirements and Fees

20. Farm Service Agency – Commodity OperationsWarehouse Licensing Fees (cont.)4. Inspection Fee only assessed on gross added space to the license during an amendment. USWA Warehousing Principles, Requirements and Fees

21. Farm Service Agency – Commodity Operations Example of initial fees if obtaining a USWA License for a Grain Elevator with a total licensed capacity of 1,585,000 bushelsOriginal Exam Cost$1,990Annual Licensing Fee$1,690Total Initial Exam Cost$3,680USWA Warehousing Principles, Requirements and FeesOther possible associated costWarehouse ReceiptsNew Scale Tickets

22. Farm Service Agency – Commodity OperationsUSWA Warehousing Principles, Requirements and FeesType of FeeOne time FeeService License6 x $35$210Inspection Fee1.5 millionMax $1700License Action 1 action$80Original Exam Cost $1,990Original Exam Cost Example of initial fees if obtaining a USWA License for a Grain Elevator with a total licensed capacity of 1,585,000 bushels

23. Farm Service Agency – Commodity OperationsUSWA Warehousing Principles, Requirements and FeesLocationsCapacityAnnual FeeSpringfield225,000 bushels$310Clinton600,000 bushels$615Madison760,000 bushels$765Annual Fee$1,690 Example of initial fees if obtaining a USWA License for a Grain Elevator with a total licensed capacity of 1,585,000 bushelsAnnual Licensing FeeThis elevator is also applying for a CCC Storage Agreement - Uniform Grain and Rice Storage Agreement (UGRSA).

24. Farm Service Agency – Commodity OperationsTemporary and Emergency Storage  Solid baseRigid sidewallCoveringAerationMust be empty by July 1Including in total licensed capacityTypically ground pileCan be Ag Bags, Farm Storage, or Short term conventional spacePrimarily for feed grainsMust be empty by March 31Must request each yearTemporaryEmergencyUSWA Warehousing Principles, Requirements and Fees

25. Carie.Pintado@kcc.usda.gov(816) 926-3966Farm Service Agency – Commodity OperationsQUESTIONS??Ned.Bergman@kcc.usda.gov(816) 926-1518www.fsa.usda.gov/programs-and-services/commodity-operations/warehouse-services/index