Negotiating State Commercial Feed Licensing Requirements

Over the years, states have increasingly regulated the sale of commercial feeds. States now typically require producers and distributors to obtain commercial feed licenses in advance of commencing operations within a given state. In addition to these commercial feed licenses, product label registration and inspection fees can also apply — further increasing the regulatory framework applicable in this area.

The regulations governing the sale and distribution of commercial feeds naturally vary from state to state depending upon the issues faced by the state. For example, South Dakota requires a sulfur maximum on all product labels for distillers dried grains sold within the state. This varied regulatory framework, however, presents potential issues for unwary producers, guarantors or distributors of commercial feed. Although it is impossible to address every regulatory nuance applicable in each state, this article briefly addresses some of the threshold issues involved in the regulation of commercial feed at the state level, and focuses on issues surrounding the three major categories of regulations applicable to the distribution of commercial feed: (1) facility or company registration; (2) registration of feed products; and (3) inspection fees. It should be noted that these three regulatory categories do not apply in each state, but instead, states typically use some combination of these registrations in order to regulate and monitor their commercial feed supply.

Facility or company registration

Many states require a company producing or distributing commercial feed within the state to first obtain a commercial feed license. Commercial feed licenses are typically valid for a one-year period (although some states do provide for biannual or even permanent licenses). Once a company begins operating in multiple states, the entity should review these licensing requirements and determine the renewal date for each state license in order to remain in compliance with state law.

Licensing fees can range in cost anywhere from $10 to $3,500 depending on the state and the amount of feed sold or distributed. Initially, this requirement seems straightforward — if a company produces commercial feed, it will need to register with the state. This issue, however, gets more complicated when a company owns multiple branches — particularly when that company intends to distribute its own feed under common product label for all or a number of its manufacturing facilities in a state other than where its production facilities are located. In this scenario, some states will allow a distributor or manufacturer to register only the distributor location, while other states will require the distributor or manufacturer to also register its production facilities (despite the fact that the facilities are not themselves distributing or serving as the guarantor for any feed sold within that state). To ensure regulatory compliance, a call to the state feed control officer will provide clarification on how the state views these threshold registration requirements. The American Association of Feed Control Officials (“AAFCO”) provides an additional resource in this area, and their Web page is a valuable tool for those attempting to regulate feed products.

Product registration

Many states also require a company to register each individual feed product being sold or distributed within the state. These fees can range from $2/product label to $70/product, and may also require the regulator to approve the product label for distribution within the state.