Livestock Dealer Bond

Individuals and businesses that buy and sell livestock in the United States are required to hold a livestock dealer bond. This surety bond is a necessity when obtaining a livestock dealer license under the Packers and Stockyards Act. A livestock dealer bond helps guarantee that a livestock dealer will operate in line with state and federal laws, protecting livestock producers in the process.

As a surety bond, a livestock dealer bond is a contract between three parties. The principal is the livestock dealer required to hold a bond; the obligee is the state or federal licensing authority requiring the bond to be in place; and the surety is the company providing the bond. If a livestock dealer does not operate according to current rules and regulations surrounding the buying and selling of livestock, a claim may be made against the bond.

Livestock dealers are not required to pay for the entire bond amount necessary to obtain their license to do business. Livestock dealer bonds are instead priced as a percentage of the total bond, typically ranging from 1 to 10%. For example, a bond requirement of $20,000 may only cost 5%, or $1,000. The percentage you pay as a livestock dealer depends on several different factors, including the bond amount required and your personal credit score.

When a surety agency is evaluating a livestock dealer bond application, they want to know how much of a risk you present as a bondholder. If you have bad credit, minimal business assets or high business liabilities, you are a higher risk than someone with better financial standing. For this risk, your bond price as a percentage of the total bond amount will be higher.

You can begin the process of securing a livestock dealer bond by submitting a fast and easy quote request online. Once you submit an application, your bond premium is determined based on the factors mentioned above.