By Max Fisher, Director of Economics and Government Affairs
With bumper crops exceeding permanent storage capacity in many parts of the country, grain elevator managers are reminded of the U.S. Department of Agriculture’s (USDA) rules for the use of temporary and emergency storage.
Regulations governing the use of temporary and emergency storage have been embodied in the U.S. Warehouse Act (USWA) Grain and Rice Licensing Agreement entered into with federally licensed grain warehouses, which also apply to licensed grain elevators operating under the Uniform Grain and Rice Storage Agreement (UGRSA) contract with USDA’s Commodity Credit Corporation. As of Jan. 9, USDA had approved approximately 440 million bushels of USWA emergency storage capacity and close to 800 million bushels of USWA temporary capacity. In addition, there is emergency and temporary storage capacity at state-licensed warehouses.
For state-licensed warehouses, including those holding UGRSA contracts, the state licensing authority determines whether and under what conditions facilities are allowed to use temporary or emergency storage. Some states do not authorize emergency storage under any circumstances.
Under the USWA Grain and Rice Licensing Agreement, the following rules apply to both temporary and emergency storage: Warehouse operators must request and obtain licensing of emergency and temporary space before using it for storage; meet the security, net worth, financial assurance and insurance requirements that apply to conventional (permanent) storage space; and maintain separate inventory records of each commodity stored in temporary and emergency storage space, as well as separate accounting in the daily position record. Further, under the USWA Grain and Rice Licensing Agreement, both temporary and emergency storage space must be operated in conjunction with a licensed conventional (permanent) warehouse structure.
In addition, all grain stored in temporary and emergency space is considered part of the licensed facility’s comingled inventory. Warehouse operators are responsible for the quality and quantity of commodities stored in temporary and emergency storage space. Warehouse operators seeking to use temporary and emergency storage space after the established cut-off dates for company-owned grain are required to remove those quantities from the daily position record, not use the commodity to cover warehouse storage obligations or warehouse-receipted obligations, and are not allowed to count the quantity of commodities stored in temporary or emergency space in any USWA warehouse examination. Finally, licensed warehouse operators are to provide written notification within 30 days of the date when all commodities stored in temporary or emergency space have been removed.
Temporary Storage: For federally licensed warehouse operators, the use of temporary storage is authorized for wheat, corn, sorghum, other feed grains; soybeans; rice; and “other commodities deemed storable” by USDA’s deputy administrator for commodity operations. Warehouse operators seeking to have additional commodities considered for temporary storage are required to justify the need and obtain advance permission from USDA.
Temporary storage for 2016-harvested crops may be used from the time the space is licensed until March 31, 2017, for soybeans and rice. For 2016-crop wheat, corn, sorghum and other feed grains, the deadline for relocating from temporary to permanent storage is July 1, 2017. USDA officials told the NGFA they allowed federally licensed warehouse operators to make requests to roll over existing licensed temporary storage space from 2015 for use for 2016-harvested crops. Temporary storage consists of structures (such as bunkers) with rigid, self-supporting sidewalls; asphalt, concrete or other approved floor; adequate aeration; and an acceptable covering, usually consisting of a polyurethane or vinyl tarp.
Emergency Storage: To obtain emergency storage (ground piles) authorization, federally licensed warehouse operators must provide written justification that a need for emergency storage exists for the current crop year, in the local area including the exact location, kind of commodity and quantity requested to be stored in emergency space. Emergency storage is authorized until March 31, 2017, for 2016-harvested crops of wheat, corn, sorghum and other feed grains.
Federally-licensed Warehouse: Federally licensed warehouse operators are required to notify the Licensing Branch at USDA’s KCCO in writing: 1) before utilizing emergency storage; 2) when temporary storage is being added to the license; and/or 3) the temporary storage structure is being modified.
Further, federally licensed warehouse operators are required to notify the Licensing Branch if emergency or temporary storage is not emptied by the established cut-off dates required under the USWA Licensing Agreement. Extensions to the deadlines for relocating grain to permanent storage are decided by the Licensing Branch on a case-by-case basis.
USDA Contact: For more information, contact Carie Pintado in the Licensing Branch at (816) 926-6474 or email firstname.lastname@example.org.
State-licensed Warehouses: State-licensed warehouse operators should contact their state licensing authority for emergency and temporary storage procedures.