Colorado Commodity Dealer / Handler Bond

Bond Penalty: Starts at $10,000

A Colorado commodity dealer bond (or handler surety bond) is required under the state's Farm Products Program. There are four license classes however only two require that that applicant file a surety bond. Per the Department of Agriculture:

  • Small Volume Dealer: no purchases over $20,000.00 annually, and no single purchase over $2,500.00 - NO surety bond required.
  • Farm Products Dealer with Cash Buyer Declaration - NO surety bond required.
  • Farm Products Dealer (with credit facility - MUST file a surety bond to cover 2% of annual purchases.
  • Commodity Handler - MUST file a surety bond.

To better understand the differences between the dealer and handler classifications the Department offers specific definitions. A farm product is is unprocessed agricultural, horticultural, viticultural, fruit, vegetable products of the soil which may include livestock, milk, honey, ensiled corn, baled, cubed or ground hay, and industrial hemp. A commodity is unprocessed small hard seeds or fruits such as wheat, corn, oats, barley, rye, sunflower seeds, soybeans, beans, grain sorghum, and industrial hemp. The explosion in the commercial cannabis bond market has also brought new interest in hemp production, which falls under the Department's regulation.

The Colorado commodity dealer bond and handler bond are the same obligation. The surety bond is a compliance guarantee of the duties owed to the state and public under Title 35 of the Colorado statutes. The surety bond amount must be issued in the minimum amount of $10,000 however the Department provides a specific formula for determining the principal's correct surety bond penalty.

Type of License Bond Determination Method
Commodity Handlers The higher bond amount, determined by either of the two following computations will be required:
1.) 2% of annual Colorado commodity purchases. Minimum bond of $10,000, maximum bond of $1,000,000. or;
2.) $.10/bu. for grain storage capacity and/or $.50/cwt. of bean storage capacity. Minimum bond of $25,000, maximum bond of $1,000,000.
Additional bond may be required, if a public warehouse's net worth falls below $.25/bu. of grain storage capacity and/or $1.25/cwt. bean storage capacity.
Farm Products Dealers (except Produce Dealers) 2% of annual Colorado purchases. $5,000 minimum. $200,000 maximum.
Produce Dealers 2% of annual Colorado purchases. $3,000 minimum. Dealers with storage facilities $10,000 minimum. $200,000 maximum.
Farm Products Brokers 2% of annual Colorado transactions. $10,000 minimum. $200,000 maximum.

Applying for a Colorado commodity dealer bond should be accomplished through a surety underwriter with knowledge and experience with the agricultural sector. National surety bond leader, Surety One, Inc. offers both surety and fidelity bonds needed by grain operators and warehousers, livestock trade professionals and hemp operators in every state where they are required. Questions about a Colorado commodity handler surety bond? Call us at (800) 373-2804, email us at Underwriting@SuretyOne.com or click here for live chat.

Surety bond application review and quoting are free of charge. There is no obligation to purchase.