Texas Grain Warehouse Bond
Protecting Texas Farmers and Grain Depositors
The Texas Grain Warehouse Bond is a crucial financial guarantee required by the Texas Department of Agriculture (TDA) for all licensed public grain warehouse operators. This bond ensures that farmers, grain producers, and depositors are protected if a warehouse operator fails to uphold their duties — such as mishandling stored grain, misreporting inventories, or violating state regulations.
If you’re applying for or renewing your Texas Grain Warehouse License, you’ll need to file this bond as part of your compliance package. The surety experts at Surety Bond Authority can guide you through every step of the process — from application to approval. Contact us today to get a free quote and fast turnaround on your Texas Grain Warehouse Bond.
What Is a Texas Grain Warehouse Bond?
A Grain Warehouse Bond is a type of license and permit bond that guarantees the faithful performance of a licensed grain warehouse operator’s duties as outlined in Chapter 14 of the Texas Agriculture Code.
The bond protects all parties with a financial interest in the grain stored at the facility — including farmers, grain dealers, and lenders — by ensuring that:
- The warehouse operator properly accounts for all grain in storage.
- Depositors are reimbursed for losses resulting from the operator’s negligence, fraud, or failure to deliver grain upon request.
- The operator complies with all laws and regulations enforced by the Texas Department of Agriculture.
If the operator violates these obligations, an injured party may file a claim against the bond. The surety company will investigate and, if the claim is valid, compensate the claimant up to the bond’s penal sum. The warehouse operator (the bond’s principal) must then reimburse the surety for any amount paid.
Who Needs This Bond?
Under Texas Agriculture Code Chapter 14, any individual or business operating as a public grain warehouse must obtain a license from the TDA. A public grain warehouse is defined as any facility that stores grain for others and issues warehouse receipts or scale tickets.
Examples include:
- Grain elevators
- Commercial storage facilities
- Cooperatives accepting grain from third parties
Before a license is granted or renewed, the applicant must file a Texas Grain Warehouse Bond in the amount prescribed by the Department of Agriculture. The bond serves as a safeguard for all grain depositors and their legal representatives.
Bond Amount and Term
The amount of the bond — known as the penal sum — is determined by the Texas Department of Agriculture based on the warehouse’s storage capacity and volume of business.
Typical bond amounts may range from $20,000 to over $500,000, depending on the facility size and risk level.
According to the official TDA bond form:
- The bond must remain in full force and effect during the license period and any renewals.
- Liability does not accumulate from year to year; it is limited to the stated bond amount.
- The bond remains active until canceled by the surety or replaced by another approved bond.
Either the principal or the surety may cancel the bond, but cancellation does not take effect until 91 days after the TDA receives written notice by certified mail. During that notice period, the bond remains valid for any obligations incurred.
Legal Foundation and Conditions
The bond form issued by the Texas Department of Agriculture (Schedule D – Operator Bond) clearly outlines the conditions of the obligation:
“If the said principal shall faithfully perform all of the duties of a licensed public grain warehouse operator, and comply with all the provisions of Chapter 14 of the Texas Agriculture Code and any rules promulgated thereunder, then this obligation shall be void; otherwise, it shall remain in full force and effect.”
This means that as long as the warehouse operator follows state regulations — accurately accounting for all stored grain and paying depositors as required — the bond will not need to be used. However, if the operator defaults, misrepresents stored grain, or fails to deliver, the bond ensures financial recourse for affected parties.
Duration, Renewal, and Cancellation
The bond is continuous and stays in effect until properly canceled. The surety company may cancel the bond by mailing a written notice of intent to cancel to the Texas Department of Agriculture, with an effective date no earlier than the 91st day after mailing.
Warehouse operators must maintain an active bond at all times while licensed. If a bond is canceled and not replaced, the license may be suspended or revoked.
To avoid any interruption in operations, we recommend beginning the renewal process at least 60 days before the bond’s expiration date.
How Much Does a Texas Grain Warehouse Bond Cost?
The cost — or premium — for a Texas Grain Warehouse Bond is only a small percentage of the total bond amount, typically ranging from 1% to 5% of the bond limit for qualified applicants.
The exact rate depends on factors such as:
- The owner’s credit score and financial history
- The size and value of the bond
- The operator’s business and licensing experience
For example:
- A $50,000 bond might cost as little as $500 per year for applicants with good credit.
- Operators with lower credit may pay slightly more, but flexible underwriting programs are available to help all qualified applicants obtain their required bond.
Our surety specialists can secure the best rate by matching you with top-rated surety companies licensed in Texas.
How to Apply
Applying for your Texas Grain Warehouse Bond is fast and simple with Surety Bond Authority.
Here’s how it works:
- Request a Free Quote – Submit a quick online application or contact us directly for personalized help.
- Provide Basic Information – We’ll need details such as your business name, license type, and bond amount.
- Underwriting Review – Your application is reviewed by our partner surety companies to determine the best available rate.
- Receive Your Bond – Once approved, your bond will be issued immediately and sent to you for filing with the Texas Department of Agriculture.
Most bonds can be approved within 24 hours, especially for applicants with strong credit.
Why Choose Surety Bond Authority?
With decades of industry experience and a focus on agricultural and license bonds, Surety Bond Authority is the trusted choice for warehouse operators across Texas. We provide:
- Competitive rates backed by A-rated surety carriers
- Fast approvals and digital bond delivery options
- Expert guidance on compliance with Texas Agriculture Code Chapter 14
- Personalized service from professionals who understand your business
When it comes to protecting your customers and your business reputation, experience matters. We’ll make sure your Texas Grain Warehouse Bond is handled quickly, correctly, and cost-effectively.
Get Started Today
Don’t risk delays in your Texas Grain Warehouse License approval. Let Surety Bond Authority simplify the process and secure your compliance with state law.
Apply online or contact us to speak with a licensed bond expert who can help you get your Texas Grain Warehouse Bond issued today.
