November 22, 2019

Passing the Test: How the State Grain Exam Protects You

With all the concerns on your mind, getting paid by your grain buyer shouldn’t be one of them. As a state-licensed grain dealer and warehouse, MaxYield Cooperative must pass a yearly exam to ensure we’re complying with all of the Iowa Department of Agriculture and Land Stewardship (IDALS) grain regulations to protect our clients.

“This exam gives you peace of mind, knowing that you’re dealing with the right company,” said Harry Bormann, MaxYield’s grain team leader.

Each year between February and June, a 10- to 12-member team from IDALS audits MaxYield’s financial statements and verifies the company’s grain inventories. This year’s exam took place at MaxYield’s locations from April 1 through midday on April 4. “This was relatively fast,” said Rick Abrahamson, MaxYield’s grain compliance care leader who handles the co-op’s grain records. “Our team works hard to keep accurate, thorough records to streamline the process.”

The average grain warehouse exam requires 61 hours, according to Richard Wahl, IDALS grain warehouse bureau chief. “MaxYield does a fine job of meeting the state’s specific standards, which exist to ensure that companies have the ability to pay for grain they purchase.”

Making sense of the 30-day grain policy

Iowa has a long history of regulating the grain industry, Wahl noted. The state’s grain warehouse laws were implemented in the 1920s, and the state’s grain dealer laws date back to the 1970s. These include the state’s Grain Indemnity Fund, which covers all grain in storage at each state-licensed warehouse. The Grain Indemnity Fund also covers cash-grain sales if a company declares bankruptcy and is unable to pay for grain they’ve purchased in the previous 30 days.

To meet the state standards, including the Grain Warehouse Bureau 30-day requirement, MaxYield must keep detailed financial statements, which IDALS field examiners analyze during the annual exam. The financial records reflect MaxYield’s 30-day grain policy, which allows clients to keep an open position on grain no longer than 30 days from the first load date of delivery. “To ensure that MaxYield stays in compliance, our team members monitor these records daily to see how many clients are approaching the 30-day requirement,” Bormann said.

During the annual exam, IDALS specialists also audit every MaxYield location and measure the grain inventories at each facility to make sure everything balances with the figures in MaxYield’s books. During the process, they randomly select scale tickets and follow each transaction to completion. “That’s why we emphasize signature of authorization forms, because proper signatures and dates on contracts are very important to the state officials,” Abrahamson said.

In addition, the IDALS team members inspect all of MaxYield’s price-later contracts and deferred contracts to make sure they are properly managed. All this makes MaxYield a better grain solutions provider, Bormann said. “We’re fortunate to have many experienced people on MaxYield’s grain team who are ready to help you with your grain marketing decisions.”

For more information on grain marketing solutions customized to your needs, contact your nearest MaxYield location or www.MaxYieldGrain.com.

 

 

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