Texas Grain Warehouse Bond
A Texas Department of Agriculture public grain warehouse license runs on its own bond formula — 10 cents per bushel of rated storage capacity, floored at $35,000 and capped at $500,000, under Tex. Agric. Code § 14.031(d). It has nothing to do with the federal USDA warehouse bond: under § 14.011(1), a facility already licensed by USDA under the U.S. Warehouse Act doesn't carry a TDA license or this bond at all — you're on one track or the other, not both.
A 200,000-bushel country elevator and a 6,000,000-bushel terminal both post a bond — just at opposite ends of the § 14.031(d) range. This page walks through the exact formula, when a deficiency bond stacks on top, and how the Panhandle and High Plains elevator economy actually uses the combination-licensing rule.
- Who requires it: The Texas Department of Agriculture (TDA), under Agriculture Code Chapter 14, for a public grain warehouse operator license.
- Amount: Set by TDA and tied to the warehouse's storage capacity. TDA publishes capacity-based schedules.
- Timing: Same-day submission; most quotes within one business day.
TDA licensing and USDA licensing don't stack on the same facility
Most warehouse-bond guides default to the federal U.S. Warehouse Act because it's national. Texas runs its own parallel system, and the statute is explicit that the two don't layer on top of each other for a given elevator.
Official Texas Requirements
"This chapter does not apply to: (1) a public grain warehouse covered by a license for the operation of a public grain warehouse issued by the United States Department of Agriculture or other federal agency..."Texas Agriculture Code, Chapter 14 — Regulation of Public Grain Warehouse Operators • Tex. Agric. Code § 14.011(1)
TDA state license (this page)
Bond = 10¢/bushel, $35,000 floor, $500,000 cap under § 14.031(d). Licensed and examined directly by the Texas Department of Agriculture — no federal filing involved.
USDA federal license
Different bond formula entirely — $50,000 to $500,000 per state under the U.S. Warehouse Act. See the national USDA warehouse bond guide if that's your track instead.
Plenty of Texas elevators choose the TDA track specifically to avoid dual licensing with a second federal regulator. If you're not sure which license your facility currently holds, check your receipts — a Texas grain warehouse receipt issued under this chapter is a different instrument from a USDA-recognized federal warehouse receipt.
The bond scales with bushels, not with a tiered schedule
Unlike states that bucket warehouse bonds into flat tiers, Texas runs a continuous formula. Every additional bushel of rated storage capacity adds exactly 10 cents to the bond, until you hit either end of the § 14.031(d) range.
Tex. Agric. Code § 14.031(d) — Grain Warehouse Bond Formula
Tex. Agric. Code § 14.031(d); Texas Department of Agriculture, Grain Warehouse Bonding Requirements (regulatory guidance, Sept. 2011).
Run the math on your own declared capacity with the warehouse bond cost calculator, or use the quote form above — it computes the § 14.031(d) figure live as you type your capacity.
Four Chapter 14 bond scenarios, not one flat requirement
"Grain warehouse bond" understates how many distinct bonding scenarios Chapter 14 actually creates. Most operators only ever need the standard capacity bond — but the other three come up often enough to plan for.
Texas grain warehouse bond scenarios
What triggers each bond and which Chapter 14 subsection controls the amount
| Bond type | When it applies | Amount rule | Governing statute |
|---|---|---|---|
| Standard capacity bond | Every applicant for a TDA public grain warehouse license | 10¢ per bushel of rated storage capacity; $35,000 floor, $500,000 cap | Tex. Agric. Code § 14.031(d) |
| Deficiency bond | Net worth is below the greater of 25¢/bushel of capacity or $200,000 | Additional bond equal to the shortfall between actual net worth and that threshold | Tex. Agric. Code § 14.031(e) |
| Additional bond | TDA finds the standing bond insufficient, or the license lapses/is suspended with receipts still outstanding | Amount set at the department's discretion, not a fixed formula | Tex. Agric. Code § 14.032 |
| Combination bond | Multiple facilities within a 60-mile diameter operated under one license, one set of records | Single bond sized to the combination's total capacity — no per-facility stacking | Tex. Agric. Code § 14.022 |
A combination bond (§ 14.022) and a deficiency bond (§ 14.031(e)) can both apply to the same operator simultaneously — combination status only consolidates the standard capacity bond, it doesn't waive the net-worth-based deficiency requirement.
The deficiency bond is triggered by your balance sheet, not your capacity
Section 14.031(e) runs on a completely separate variable from the storage-capacity bond above: net worth. If your actual net worth falls below the greater of 25 cents per bushel of rated capacity or $200,000, TDA requires a second bond covering the gap — on top of, not instead of, the standard § 14.031(d) bond.
Net worth clears the threshold
A 1,000,000-bushel operator needs at least $250,000 net worth (1,000,000 × $0.25) to clear the threshold. If actual net worth is $300,000, no deficiency bond — just the standard $100,000 capacity bond.
Net worth falls short
Same 1,000,000-bushel operator with only $150,000 net worth is $100,000 short of the $250,000 threshold — a $100,000 deficiency bond stacks on top of the $100,000 standard bond.
This is exactly why the quote form above asks about net worth directly — it's the one qualifying question that determines whether you're underwriting one bond or two.
The Panhandle and High Plains run on multi-site combinations — one bond, not five
Wheat and sorghum country elevator networks around Amarillo, Lubbock, and the Plainview corridor routinely operate several storage points feeding into a shared terminal. Section 14.022 was built for exactly this pattern: warehouses operated within a 60-mile diameter can be licensed as a single "combination" instead of as separate facilities.
Qualify for combination status and § 14.022(b) requires a single recordkeeping system, one unique receipt series bearing the combination's name (not individual facility names), one daily position report covering the whole combination — and per § 14.022(b)(6), "a single unique bond or bond substitute" sized to the combination's total capacity. That's a materially different bonding cost than licensing five separate elevators, each independently hitting the $35,000 floor under § 14.023, which requires a separate bond per individually licensed facility outside a qualifying combination.
Combination status isn't automatic — § 14.022(c) also requires that assets, storage obligations, and records stay separate from any other business the operator runs, and each licensed combination operates as its own entity under one name. If your Panhandle network spans more than 60 miles, or you also run facilities outside the combination, those fall back to individual licensing and individual bonds.
What a Texas grain warehouse bond costs in 2026
The bond amount comes straight from § 14.031(d)'s bushel formula above — the annual premium is a small percentage of that bond amount, priced primarily on the operator's financial strength and credit.
Texas Grain Warehouse Bond Premium by Credit Tier
Based on a $240,000 bond amount
- Excellent (740+)Rate: 0.5%$1,200 / yr
- Very Good (700–739)Rate: 0.6% – 1.0%$1,440 – $2,400 / yr
- Good (650–699)Rate: 1.0% – 1.5%$2,400 – $3,600 / yr
- Fair (600–649)Rate: 1.5% – 2.0%$3,600 – $4,800 / yr
- Poor (550–599)Rate: 2.0% – 2.5%$4,800 – $6,000 / yr
- Subprime (<550)Rate: 2.5% – 3.0%$6,000 – $7,200 / yr
Premiums shown are annual on a $240,000 bond — a 2,400,000-bushel terminal elevator near the middle of the § 14.031(d) range. Rates stay within the 0.5%-3% band that applies to warehouse bonds generally; a deficiency bond, if required under § 14.031(e), is underwritten and priced separately.
Getting your TDA grain warehouse bond filed
Confirm you're on the state track
If your facility already holds a USDA license under the U.S. Warehouse Act, § 14.011(1) means you don't need this bond — check your current warehouse receipt form before applying.
Declare your rated storage capacity
Bushels drive the § 14.031(d) formula directly. We compute the exact bond figure — floor, cap, or the 10¢/bushel figure in between.
Confirm net worth against the § 14.031(e) threshold
If net worth is below 25¢/bushel or $200,000 (whichever is greater), we place the deficiency bond alongside the standard bond so both clear TDA's § 14.023 licensing review together.
Combination or individual license?
Operating multiple facilities within 60 miles under one license changes the bond structure under § 14.022 — tell us your facility layout so we bond the combination correctly, not each site separately.
File before your TDA application deadline
We deliver the bond on the department's prescribed form in time for a new license application or your annual renewal.
Know your storage capacity in bushels? We'll write the bond to the exact § 14.031(d) figure and file it on TDA's prescribed bond form.
Start my Texas grain warehouse bond quoteRelated Texas and warehouse bonds
Texas grain operators and agribusiness often need more than the warehouse bond itself:
Bond written to your exact bushel figure
No rounding up to the next tier — the § 14.031(d) formula, calculated correctly
Deficiency bonds underwritten correctly
We flag § 14.031(e) exposure before TDA does
Treasury-listed carriers
TDA-accepted bond forms, fast quotes for qualifying operators
What Texas grain warehouse operators ask about this bond
Does a Texas grain elevator need a TDA bond if it already has a USDA warehouse license?
No — the two licensing tracks are mutually exclusive for the same facility, not stacked. Tex. Agric. Code § 14.011(1) says Chapter 14 "does not apply to a public grain warehouse covered by a license for the operation of a public grain warehouse issued by the United States Department of Agriculture or other federal agency." So a facility federally licensed under the U.S. Warehouse Act doesn't also need a Texas Department of Agriculture (TDA) license or the Chapter 14 bond — but the reverse is also true: a TDA-licensed public grain warehouse that never applied for a federal license runs entirely on the state's own bonding formula, which is different from USDA's. A lot of Texas elevators run the state track specifically because it avoids duplicate licensing with a second regulator.
How does the Texas Department of Agriculture calculate the bond amount for a grain warehouse license?
It's a flat rate tied to your declared storage capacity, not a tiered schedule. Tex. Agric. Code § 14.031(d) sets the bond at "not less than $35,000 and... based on 10 cents per bushel of storage capacity, not to exceed a maximum of $500,000." So a 200,000-bushel country elevator bonds at the $35,000 floor (200,000 × $0.10 = $20,000, which is below the floor, so $35,000 controls), a 2,400,000-bushel terminal elevator bonds at exactly $240,000, and anything above 5,000,000 bushels caps out at $500,000 regardless of actual capacity. There's no separate rate for different grain types — wheat, sorghum, corn, and soybean capacity all count the same toward the bushel total.
What's a Texas grain warehouse deficiency bond, and when do I have to file one on top of the standard bond?
It's a second, additional bond triggered by your balance sheet, not your storage capacity. Tex. Agric. Code § 14.031(e) requires it when "the actual net worth of an applicant equals less than the greater of either 25 cents per bushel of storage capacity or $200,000" — the deficiency bond amount is the gap between your actual net worth and that threshold. So a warehouse with 1,000,000 bushels of capacity needs net worth of at least $250,000 (1,000,000 × $0.25) to clear the threshold; if actual net worth is only $150,000, the operator files a deficiency bond for the $100,000 shortfall in addition to the standard § 14.031(d) capacity bond. It's explicitly additive — the statute says the deficiency bond "is in addition to the bond required of an applicant by this section," not a substitute for it.
Can one bond cover several grain elevators I operate across the Texas Panhandle?
Yes, if they're close enough to qualify as a "combination" under Tex. Agric. Code § 14.022 — defined as public grain warehouses operated within an area no larger than 60 miles in diameter, under a single set of complete records, a single unique receipt series, and a single daily position report. Get that combination licensed as one unit and § 14.022(b)(6) requires "a single unique bond or bond substitute" sized to the combination's total rated capacity — you don't stack a separate $35,000-plus bond for every individual facility. Outside a qualifying combination, though, § 14.023 requires a separate bond per individually licensed facility; you can't split one bond across unrelated licenses to save on premium.
How is the Chapter 14 warehouse bond different from Texas's Grain Producer Indemnity Fund?
They protect against different failures, and — unlike the bond — the fund isn't reliably active. The § 14.031 bond is posted by the warehouse operator and pays out when that specific operator fails to return receipted or open-storage grain, issues fraudulent receipts, or otherwise breaches its Chapter 14 obligations — a classic surety bond, always in force for a licensed operator. The Texas Grain Producer Indemnity Fund, created under Agriculture Code Title 3, Chapter 41, Subchapter I, was designed as a separate producer-funded backstop for grain-buyer (not warehouse) failures, run by the Texas Grain Producer Indemnity Board. But Texas producers voted against funding it in a December 2017 referendum, and Subchapter I provides that the board is not abolished but sits inactive until at least 200 grain producers petition the commissioner to reactivate it — with the Texas Department of Agriculture administering whatever balance remains in the fund in the meantime. If you're a warehouse operator, the § 14.031 bond is what you must post to get licensed, full stop, regardless of the indemnity fund's status. If you're a depositor asking "what else protects me," don't assume the indemnity fund is currently collecting assessments or paying claims — confirm its active/inactive status with TDA before relying on it.
What happens if TDA decides my existing bond is no longer big enough?
The department can order more coverage mid-license, and it doesn't need a capacity increase to do it. Tex. Agric. Code § 14.032(a) states plainly: "If the department determines that an approved bond is insufficient, the department shall require the warehouse operator to give additional bond." Separately, § 14.032(b) lets the department require a bond even after a license has been suspended, revoked, or expired, "to protect depositors of grain for as long as any receipts or open storage accounts remain outstanding" — so bonding exposure doesn't necessarily end when the license does. On the claims side, § 14.065 gives depositors up to the second anniversary of the license's expiration to bring an action on the bond, after first making written demand on the department (generally within 31 days of that demand before independent legal action).
All content is researched from official state and federal sources (.gov). BuySuretyBonds.com works with Treasury-listed surety carriers.
General information, not legal or underwriting advice. Texas public grain warehouse licensing and bonding requirements are set by statute (Tex. Agric. Code §§ 14.011, 14.021 through 14.023, 14.031, 14.032, and 14.065) and administered by the Texas Department of Agriculture, and they change over time. Confirm current requirements directly with the department before relying on this page, then request a quote for your specific facility's capacity and financial profile.
Tell us your bushels — we'll do the § 14.031(d) math
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