Milk Handler Bond - Statewide in California
Table of Contents
Brief Summary
The bond amount is set by how much milk you buy from producers each day, from $5,000 up to $20,000 per plant, and you only need it if you buy from producers or producer cooperatives. Get your daily average gallons right before you order the bond, and make sure the name on it matches your CDFA application exactly.
California requires a surety bond from a licensed milk handler that buys milk or cream from producers or producer cooperatives, under Food and Agricultural Code sections 61405 and 62182. The amount runs from $5,000 to $20,000 per plant based on daily average purchases from producers, and handlers with more than one plant post $20,000 times the number of plants on a single bond. It is filed on CDFA Form 205-030.
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How to Apply for a Milk Handler Bond:
- Work out the daily average gallons purchased from producers at each plant, counting 10 gallons of cream as 100 gallons of milk.
- Pick the bond amount from the CDFA tiers, or $20,000 times the number of plants if you run more than one.
- Use the legal business name exactly as it appears on the Milk Handler License application.
- Have the surety complete CDFA Form 205-030.
- Enter the bonding company, phone number and bond amount in question 22 of the application.
- Send the application with the $25 two year license fee to CDFA.
Detailed Information About the California Milk Handler Bond:
Which tier you are in
The California Department of Food and Agriculture sets the milk handler bond by the daily average volume of milk you buy from producers, per plant:
- Under 1,000 gallons a day: $5,000
- 1,000 to 3,999 gallons a day: $10,000
- 4,000 to 7,999 gallons a day: $15,000
- 8,000 gallons a day or more: $20,000
Handlers operating more than one plant in California post one bond covering all of them. The amount is $20,000 multiplied by the number of plants.
Cream counts too. For the bond calculation, 10 gallons of cream equals 100 gallons of milk.
Who needs the bond
Every person who buys, receives or takes control of bulk unprocessed or pasteurized market or manufacturing milk for manufacture, processing, sale or other handling needs a Milk Handler License from CDFA, one for each plant. The bond is tied to where the milk comes from. The application says a bond is required if you purchase from a producer or a producer cooperative. A handler that buys only from other handlers writes "None" in the bond section of the application.
What the bond guarantees
The bond runs to the State of California in favor of every producer whose milk or cream the handler buys. It is conditioned on the handler paying all amounts due to producers. The surety's total liability is capped at the bond amount. The surety also waives any right to be released because the Secretary of Food and Agriculture gave the handler extra time to pay.
The form and the license
CDFA prescribes the Milk Handler's Surety Bond Form, Form 205-030, written by an admitted surety insurer in California. The bond is continuous and runs with each license period and renewal until the surety cancels under Code of Civil Procedure 996.310 and following. The name on the license application and the bond must match.
The license itself carries a $25 fee for a two year period. The current period ends December 31, 2027. The application also asks whether you have written contracts with every producer you buy from and whether anyone in the business has had a payment made from a surety bond.
What the premium depends on
The surety prices the bond from the required amount and the financial strength and credit of the handler and its owners. Because the bond pays producers when a handler does not, a history of slow or missed producer payments weighs heavily.
Eligibility and Requirements for a California Milk Handler Bond:
- An admitted surety insurer in California.
- CDFA Milk Handler's Surety Bond Form 205-030.
- Bond in favor of the State of California and every producer the handler buys from.
- Bond amount matched to daily average producer purchases per plant.
- One combined bond for all California plants when operating more than one.
- Business name on the bond matching the license application.
California Milk Handler Bond FAQs:
It depends on daily average purchases from producers per plant: $5,000 under 1,000 gallons, $10,000 for 1,000 to 3,999, $15,000 for 4,000 to 7,999 and $20,000 for 8,000 or more. Multiple plants post $20,000 per plant on one bond.
The CDFA application ties the bond to purchases from producers or producer cooperatives. If you do not buy from them, you write None in the bond section.
For the bond calculation, 10 gallons of cream is treated as 100 gallons of milk.
No. Form 205-030 is continuous and runs with each license period and renewal until the surety cancels it.
Producers who sold milk or cream to the handler and were not paid amounts due.
