Grain Dealers Regulatory Compilation

Grain Dealer Regulations - Prompt Payments

What are Prompt Payment Statutes?

Prompt payment statutes are used to provide timelines or clarification for when grain dealers are required to pay for goods received.

Which States Have Prompt Payment Statutes?

Of the thirty-four states which have created legislation aimed at regulating grain dealers, fourteen states have statutes specifically for prompt payments: California, Florida, Hawaii, Idaho, Iowa, Louisiana, Minnesota, Missouri, Montana, Nebraska, Nevada, New York, Oregon, and Washington.

What is Typical of Each Provision?

• Payment
  • Time—Time for payment after goods are received is typically controlled by language in the contract. If the contract does not specify when payment should be made, statute language requires payment be made anywhere from 10 days to 6 months from the delivery date. Most states require payment within 30 days of the delivery date.
  • Manner—The manner of payment is not specified in most state statute language and would typically be stated in the contract. Statutes that mention payment methods include check, electronic transfer, cash, or cashier’s check.

State-by-State Statutory Language for Each Provision

California | Florida | Hawaii | Idaho | Iowa | Louisiana | Minnesota | Missouri | Montana |  Nebraska | Nevada | New York | Oregon | Washington 

California

“Every dealer shall pay for any farm product purchased by him at the time and in the manner specified in the contract with the producer or licensee. If no time for payment is set by such contract or made at the time of the delivery, the dealer shall pay for the farm product within 30 days from the delivery or taking possession of such farm product.”

Cal. Food & Agric. § 56302 (2025)

Upon the following, a licensee operating as a dealer shall notify the seller on a form to be prescribed by the department, as to the requirements set forth in Sections 56302 and 56620:

(a) Upon delinquency of a contract.

(b) If payment is not made within 30 days when the contract does not specify time of payment or if there is no contract.

(c) If payment is not made within 30 days when the contract is oral, irrespective of the agreed time of payment.

The dealer shall have the burden of proof as to the timely delivery of such a notice.

Such a notice shall only be required as to the first contract between any particular seller and dealer during any one calendar year.”

Cal. Food & Agric. § 56302.5 (2025)

Florida

“Each grain dealer shall, within 6 months of the date of the contract for sale of grain or, in lieu of a contract, within 6 months of the date of the first delivery for the marketing season, make payment to producers for the grain delivered to the dealer. This provision does not apply in cases when grain is held for storage.”

Fla. Stat. § 604.34 (2025)

Hawaii

“Every commission merchant, dealer, broker, agent, processor, or retail merchant shall make payment in full to the producer within such time as may be prescribed by the department.  Payment in full means payment of the price agreed upon by the producer and the commission merchant, dealer, broker, agent, processor, or retail merchant, except that, in the case of consignment transactions, the full amount realized from sales, including collections for damage claims, less the agreed commission and other charges, shall be paid.”

Haw. Rev. Stat. § 145-6 (2025)

Idaho

“A person required to be licensed as a commodity dealer under the provisions of this chapter shall pay the purchase price to the owner or his agent for agricultural commodities upon delivery or demand by the owner or agent, but not later than thirty (30) days after delivery by the owner or agent, unless otherwise agreed to by the parties in writing. As used in this section, ‘delivery’ means the transfer of title to and possession of agricultural commodities by the owner or agent to the commodity dealer or to another person in accordance with the agreement of the owner or agent and the commodity dealer. As used in this section, ‘payment’ means the actual payment or tender of payment by the commodity dealer to the owner or agent of the agreed purchase price.”

Idaho Code. Ann. §69-510 (2025)

Iowa

“1. a. A grain dealer licensed or required to be licensed pursuant to section 203.3 shall pay the purchase price to the seller for grain upon delivery or demand by the seller, but not later than thirty days after delivery by the seller unless in accordance with the terms of a credit-sale contract that satisfies the requirements of this chapter. The department shall adopt rules for payment by check and electronic funds transfer.

b. A grain dealer licensed or required to be licensed pursuant to section 203.3 shall not hold a check for the purchase of grain more than five days after the grain dealer issues a check to the seller. After that date, the grain dealer shall deliver the check in person or by mail to the seller’s last known address.”

Iowa Code § 203.8(1) (2025)

Louisiana

“Each grain dealer who purchases grain from producers under a spot price or daily market contract shall pay the producer for the grain within ten working days after the day the grain is delivered pursuant to the contract of sale.”

La. Rev. Stat. Ann. §3:3414.1 (2024)

“Prompt payment for rice

A. The provisions of this Section shall apply to each transaction in which a purchaser buys rice from a producer under a bid contract.

B. As used in this Section, the following terms shall have the following meanings ascribed to them:

(1) ‘Bid contract’ means an agreement between a producer and a purchaser under which the purchaser examines samples of rice and extends to the producer an offer to purchase the rice at a price based on the quality of the sample.

(2) ‘Confirmation date’ means the date on which the bid contract was confirmed.

(3) ‘Confirmed’ means the bid contract has been agreed to.  A bid contract is confirmed when the producer and the purchaser agree to the quantity and price of the rice to be sold.

(4) ‘Delivery date’ means the date on which the purchaser is required to take delivery of the rice, either under the provisions of this Section or under the provisions of a written agreement between the producer and the purchaser.

(5) ‘Person’ means any individual, partnership, corporation, association, or other legal entity.

(6) ‘Purchaser’ means any person who purchases rice from a producer under a bid contract.

C. Each purchaser shall take possession of the rice which is the subject of the bid contract no later than the fourteenth calendar day after the confirmation date unless the producer and the purchaser agree in writing that the purchaser shall take possession of the rice on a different delivery date.

D. If the purchaser does not take possession of the rice on or before any delivery date, the purchaser shall pay all storage and related charges for the storage of the rice after each delivery date, with such time not to exceed thirty days following each such delivery date.

E. After the thirtieth day following any delivery date, if the purchaser has not taken possession of the rice, the producer shall have the option to either continue to hold the rice for delivery to the purchaser, deliver the rice to another purchaser, or amend the original bid contract by mutual written consent.

F. Each purchaser shall pay for the rice purchased from each producer under a bid contract no later than the tenth calendar day after the purchaser takes possession of the rice or receives accurate distribution instructions from the seller, whichever is later.

G. If the purchaser does not make payment as required in Subsection F, the purchaser shall pay the producer interest on the purchase price at the legal rate of interest as established in R.S. 9:3500.

H. Any grain dealer acting solely as a commissioned agent for the producer in a bid contract transaction shall not be considered a purchaser or a producer in a bid contract where the actual purchasing grain dealer does not take possession of the rice.”

La. Rev. Stat. Ann. §3414.2 (2024)

Minnesota

“For a cash sale of a shipment of grain, the grain buyer shall tender payment to the seller in cash, by check, or by wiring or mailing payment to the seller’s account. The grain buyer must tender payment as required under this subdivision not later than the close of business on the next day after the sale of the shipment, or within 48 hours after the sale of the shipment, whichever is later.”

Minn. Stat. §223.17 subd. 5 (2024)

Missouri

“In general, a person licensed as a grain dealer shall make payment of the agreed-upon purchase price to the seller of grain upon delivery or demand of said seller or his authorized agent, unless a written grain purchase contract or valid deferred payment contract shall provide otherwise.  However, every person licensed as a grain dealer shall establish and properly document the agreed-upon purchase price of all grain he buys as prescribed by the director or as otherwise provided by law. When a dealer has failed to make payment upon demand of the seller and such failure has come to the attention of the director, the director may request the dealer to make payment.  Such request may be made verbally or in writing. The director may require the dealer to make payment with a certified or cashier’s check, or in cash. The license may be modified, suspended or revoked if the dealer fails to make timely payment as requested by the director.

…

4. A person licensed as a class III, IV, V or VI grain dealer shall make payment to the seller within thirty days of delivery or upon demand of the seller or his authorized agent, whichever occurs first.  A class III, IV, V, or VI dealer shall not enter into any type of credit sales contract.”

Mo. Rev. Stat. §276.461 (2025)

Montana

“(1) A commodity dealer who purchases agricultural commodities by purchase contract shall maintain books, records, and other documents as required by the department to establish compliance with the provisions of this section.

(2) In addition to other required information, a purchase contract must contain or provide for all of the following:

(a) the seller’s and purchaser’s name and address;

(b) the conditions of delivery;

(c) the amount and kind of agricultural commodities delivered;

(d) the price per unit or basis of value;

(e) the date payment is to be made; and

(f) a notice of financial risk involved in the delayed payment contract, in a form the department shall adopt pursuant to the rulemaking authority provided in 80-4-403.

(3) Title to all agricultural commodities sold by purchase contract is in the purchaser as of the time the agricultural commodities are delivered to and in physical control of the purchaser unless the contract provides otherwise. The contract must be signed by both parties and executed in duplicate. One copy must be retained by the commodity dealer, and one copy must be provided to the seller. Upon revocation, suspension, or termination of a commodity dealer’s or warehouse operator’s license, the department may advance the payment date for all delayed payment contracts to a date not later than 30 days following the effective date of the revocation, suspension, or termination. When not otherwise provided, the purchase price for all agricultural commodities must be determined as of the effective date of revocation, suspension, or termination in accordance with all other provisions of the contract. However, if the business of the commodity dealer is sold to another licensed commodity dealer, purchase contracts may be assigned to the purchasing commodity dealer.

(4) Any contract that does not satisfy the conditions imposed by this part is considered a sale other than a purchase contract and is subject to the provisions of 80-4-608.”

Mont. Code Ann. § 80-4-422 (2023)

“No person engaged in business as a commodity dealer may draw or deliver any check, draft, or order for payment of money upon any bank for the purchase of agricultural commodities when at the time of drawing or delivery the maker or drawer does not have sufficient funds or has failed to arrange for credit with the bank or depository for payment in full upon presentation of the check, draft, or order for payment of money. The word ‘credit’ as used in this section means an arrangement or understanding with the bank or depository for payment of the check, draft, or order.”

Mont. Code Ann. § 80-4-607 (2023)

“(1) A person required to be licensed as a commodity dealer shall pay 90% of the purchase price to the owner or the owner’s agent for agricultural commodities upon delivery and demand by the owner or agent and the remaining 10% not later than 30 days after delivery by the owner or agent unless otherwise agreed to in writing by the parties. Title to agricultural commodities sold to a commodity dealer under this section transfers to the commodity dealer upon physical delivery of the commodity.”

Mont. Code Ann. §80-4-608 (2023)

Nebraska

“(1) No seller shall have recourse to the grain dealer’s security unless the seller:

(a) Demands payment from the grain dealer within fifteen days after the date of the last shipment of any contract;

(b) Negotiates any negotiable instrument issued as payment for grain by the grain dealer within fifteen days after its issuance; and

(c) Notifies the commission within fifteen days after any apparent loss to be covered under the terms of the grain dealer’s security.

(2) The grain dealer’s security shall provide security for direct delivery grain until any post-direct delivery storage position is created for a period not to exceed fifteen days after the date of the last shipment of the contract.”

Neb. Rev. Stat. §75-905 (2025)

Nevada

“3. Each dealer shall pay for farm products delivered to him or her at the time and in the manner specified in the contract with the producer, but if no time is set by the contract, or at the time of the delivery, within 30 days after the delivery or taking possession of the farm products, except that livestock whose sale is subject to the Packers and Stockyards Act, 7 U.S.C. §§ 181 to 231, inclusive, must be paid for within the period required by that act and any applicable regulations adopted pursuant thereto.”

Nev. Rev. Stat. § 576.125(3) (2025)

New York

“3. ‘Prompt payment’ means payment within thirty days of the date farm products sold by a producer to a dealer are delivered to such dealer, or other person as the purchaser may designate, or such other period of time as otherwise agreed upon in a writing signed by the dealer and the producer on or before delivery of said farm products, provided that in no event shall such period exceed one hundred twenty days from said date of delivery.”

N. Y. A.G.M. Law § 245.3 (2025)

“It shall be unlawful: 

…

3. For any dealer to reject or fail to account and make prompt payment, without reasonable cause, for any farm products, bought or contracted to be bought or negotiated to be bought by such dealer.”

N. Y. A.G.M. Law § 246.3 (2025)

“1. (a) A producer who has not received full payment of amounts due for farm products in accordance with the prompt payment provisions of sections two hundred forty-five and two hundred forty-six of this article shall immediately notify the commissioner in writing of such default in payment. The notification shall set forth the dates of the transactions, the dealer to whom the farm products were sold and/or delivered, the type of product delivered, the amount and the price agreed upon for such product.

(b) If the commissioner has reason to believe that a licensed dealer has defaulted in making payments for farm products to producers, the commissioner shall give notice to producers to file verified claims within thirty days of such notice. The commissioner shall examine the claims so filed, determine the amount due upon such claims, and certify the amounts due each claimant. No claims against the security or the agricultural producers security fund shall be allowed for sales of farm products: (i) to any unlicensed person; (ii) that occurred more than one hundred twenty days after the earliest transaction between the producer and the dealer that remains unpaid as of the date the claim is filed, whether or not that earliest unpaid transaction is included in the claim; or (iii) where a claim is submitted more than three hundred sixty-five days after sale and delivery, but in no event beyond the expiration of the thirty day period provided in the notice published by the commissioner pursuant to this section.

(c) Claims shall be chargeable first against any initial or additional bond or letter of credit provided by the defaulting dealer, and in the event such security is not sufficient to pay the amount owed to all producers, the amounts recovered shall be divided pro rata among all claimants. Any remaining amount of the certified claim shall be payable as set forth in paragraph (d) of this subdivision. The commissioner may bring an action upon the bonds or letter of credit and for purposes of such action his or her determination certifying the amounts due shall be presumptive evidence of the facts stated therein. In the event that the issuer of the bond or letter of credit fails or refuses to honor its obligation to pay under the bond or letter of credit within thirty days from the date of the commissioner’s demand for payment, the commissioner may pay from the agricultural producers security fund the amount of the demand and bring an action to recover the amount of the demand from the issuer of the bond or letter of credit. Any recovery in such action shall be deposited in the agricultural producers security fund.

(d) The remainder of such claims against a licensee who elects not tobe subject to the additional bonding requirements which are not
 satisfied by the bond or letter of credit or alternative security shall be processed first against any credit insurance purchased pursuant to this article and any balance thereafter against the agricultural producers security fund. Payment of individual claims against the fund shall not exceed eighty percent of the difference between the total amount recovered on that claim against the bond or other security and the amount determined to be owed pursuant to paragraph (b) of this subdivision. In the event that the fund is not sufficient to pay such amounts owed to the claimants, recovery from the fund shall be divided pro rata.

2. If any claim is paid from the agricultural producers security fund, the defaulting licensee shall be liable to the commissioner for the benefit of the fund for the amount of claims so paid. If the defaulting licensee has not paid the commissioner within fifteen days after personal service upon him or her of the commissioner’s certification of payment of a claim from the fund for which the licensee has been  found liable to the claimant, the commissioner may issue a warrant under seal of the department directed to the sheriff of any county of the state commanding him or her to levy upon and sell the real and personal property of the defaulting licensee, found within his or her county, for the payment of the amount of such claim with interest and the cost of executing the warrant, and to return such warrant to the commissioner and pay to him or her the money collected by virtue thereof within sixty days after the receipt of such warrant. The commissioner may file with the clerk of any county a copy of such warrant, and thereupon the clerk shall enter in the judgment docket, in the column for judgment debtors, the name of the defaulting licensee designated in the warrant, and in appropriate columns the amount of the licensee’s liability to the commissioner for claims, interest and costs, and the date when such copy is filed. Thereupon, the amount of such warrant so docketed shall become a lien, relating back to and deemed perfected as of the date of the dealer’s earliest default in payment to producers as determined by the commissioner, upon and shall bind the real and personal property and chattels real of the person against whom it is issued in the same manner as a judgment duly docketed in the office of such clerk. The sheriff shall thereupon proceed upon the same in all respects, with like effect, and in the same manner prescribed by law in respect to executions issued against property upon judgments of a court of record, and shall be entitled to the same fees for his or her services in executing the warrant, to be collected in the same manner. Upon such filing of a copy of a warrant, the commissioner shall have the same remedies to enforce the licensee’s liability as if he or she had recovered judgment against the licensee for the amount of the warrant.”

N. Y. A.G.M. Law § 250-B (2025)

Oregon

Or. Rev. Stat. Ann. § 576.705 (2025)

Washington

Wash. Rev. Code Ann. § 22.09.620 (2025)

“When a violation has occurred which results in improper payment or nonpayment and a claim is made to the department and the payment is secured through the actions of the department the following charges will be made to the depositor for the action of the department in the matter:

(1) When reported within thirty days from time of default, no charge.

(2) When reported thirty days to one hundred eighty days from time of default, five percent.

(3) When reported after one hundred eighty days from time of default, ten percent.”

Wash. Rev. Code Ann. § 22.09.630 (2025)