TEXAS GRAIN & FEED ASSOCIATION USWA WAREHOUSING PRINCIPLES, REQUIREMENTS AND FEES Farm Service Agency – Commodity Operations

100th Anniversary Created in 1916 Purpose To Stabilize Agricultural markets and facilitate commerce To Establish a system of public commodity warehouses USWA Warehousing Principles, Requirements and Fees

Farm Service Agency – Commodity Operations Scope 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, Tobacco USWA Warehousing Principles, Requirements and Fees

Farm Service Agency – Commodity Operations Overview USWA relationship with Commodity Credit Corporation Principals of the Licensing Program (including requirements) USWA Licensing Fees USWA Warehousing Principles, Requirements and Fees

Farm Service Agency – Commodity Operations USWA relationship with Commodity Credit Corporation  CCC created by Congress in 1933 Purpose included development of system of farm income support and commodity price support Evolved 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

Farm Service Agency – Commodity Operations USWA 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 programs Allows for warehouse examinations be performed on approved elevators Requires that approved warehouses comply with warehouse licensing laws USWA Warehousing Principles, Requirements and Fees

Farm Service Agency – Commodity Operations Principles  Financial Integrity  Depositor Protections  Adherence to Rules and Regulations  The Warehouse Examination Process  Warehouse Receipt Validation USWA Warehousing Principles, Requirements and Fees

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

Farm Service Agency – Commodity Operations  Depositor Protections Surety Bond, Irrevocable Letter of Credit, US Treasury Notes Maximum Bond amount per state is $500,000 Additional bond amounts required for financial deficiencies USWA Warehousing Principles, Requirements and Fees

Farm Service Agency – Commodity Operations  Rules and Regulations Maintain quantity and quality of grain in store to cover obligations Maintain physical structures of warehouse and operating systems Provide Safe bin Access USWA Warehousing Principles, Requirements and Fees

Farm Service Agency – Commodity Operations  Rules and Regulations Maintain system of records Maintain Grain Stock Insurance Coverage Posting of Public Tariff Non Discrimination practices License to Inspect/Weigh/Grade Commodity USWA Warehousing Principles, Requirements and Fees

Farm Service Agency – Commodity Operations  Warehouse Examination Program Verifies 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

Farm Service Agency – Commodity Operations  Warehouse Examination Program Reviews 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

Farm Service Agency – Commodity Operations  Warehouse Receipt Document of title that can be negotiable or non-negotiable Electronic or Paper series controlled by USWA Common 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

Farm Service Agency – Commodity Operations Warehouse Licensing Fees 1.Annual User Fee 2.License Action Fee 3.Service License Fee 4.Inspection Fee USWA Warehousing Principles, Requirements and Fees

Farm Service Agency – Commodity Operations USWA Warehousing Principles, Requirements and Fees

Farm Service Agency – Commodity Operations Warehouse Licensing Fees (cont.) 1.Annual User Fee Calculated by each functional unit/location Based on each location’s licensed bushel capacity Your 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

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

Farm Service Agency – Commodity Operations Warehouse Licensing Fees (cont.) 3. Service License Fee Inspector/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

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

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 bushels Original Exam Cost$1,990 Annual Licensing Fee$1,690 Total Initial Exam Cost$3,680 USWA Warehousing Principles, Requirements and Fees Other possible associated cost Warehouse Receipts New Scale Tickets

Farm Service Agency – Commodity Operations USWA Warehousing Principles, Requirements and Fees Type of FeeOne time Fee Service License6 x $35$210 Inspection Fee1.5 millionMax $1700 License Action1 action$80 Original Exam Cost $1,990 Original 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

Farm Service Agency – Commodity Operations USWA Warehousing Principles, Requirements and Fees LocationsCapacityAnnual Fee Springfield225,000 bushels$310 Clinton600,000 bushels$615 Madison760,000 bushels$765 Annual 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 bushels Annual Licensing Fee This elevator is also applying for a CCC Storage Agreement - Uniform Grain and Rice Storage Agreement (UGRSA).

Farm Service Agency – Commodity Operations Temporary and Emergency Storage Solid base Rigid sidewall Covering Aeration Must be empty by July 1 Including in total licensed capacity Typically ground pile Can be Ag Bags, Farm Storage, or Short term conventional space Primarily for feed grains Must be empty by March 31 Must request each year TemporaryEmergency USWA Warehousing Principles, Requirements and Fees

(816) Farm Service Agency – Commodity Operations QUESTIONS?? (816)