A producer may request a negotiable warehouse receipt for grain delivered and placed on storage. A negotiable receipt enables the producer to obtain a government loan on the number of bushels stated o the receipt.

When requesting a warehouse receipt for loan purposes, the producer must provide the following information to the elevator:

1. Producer's name as listed at the Farm Service Agency
2. Commodity to be receipted (corn, soybean, wheat)
3. Bushel volume to be listed on receipt
4. Month when loan application will be made
5. County that will issue the loan

Corn is dried and shrunk to 14.5% moisture on the warehouse receipt; wet and dry bushels are stated on the receipt. The FSA will discount the producer $0.005 per bushel because FSA requires 14.0% moisture corn for loan. The FSA discount is less costly to the producer than if the elevator dried the corn to 14.0%, which would result in an additional drying charge of $0.015 per bushel. A corn delivery that averages 14.0% will be issued on the receipt as 14.0% resulting in no FSA discount.

Storage charges for the duration of the loan (9 months), drying charges, and all other discounts pertaining to the receipted grain must be paid to the elevator before the warehouse receipt will be released to the producer. The producer will be reimbursed for any storage prepaid but not utilized if the grain is sold before loan maturity.

When a producer sells warehouse receipted grain, the elevator will notify the FSA of the sale and issue payment to the FSA for the outstanding balance of the loan. After receiving payment, the FSA will release the warehouse receipt to SCG and in turn payment will be issued to the producer for the balance of the sale (grain sale, less FSA payment, plus any prepaid storage reimbursement). Payment cannot be released to the producer until the warehouse receipt is received by SCG.

A negotiable warehouse receipt is a legally binding document. If the receipt is lost or destroyed while in the producer's possession, a bonding procedure is required before payment can be issued for the grain listed on the receipt. The producer pays for the bonding, which is for the value of the grain at the time of the bond application. The bond remains in effect until the warehouse receipt is found and turned over to the elevator. If destroyed, the bond remains in effect indefinitely. SCG will assist the producer with the bonding if this situation occurs.