We recommend sending notices of your security interest to the grain elevator at least annually. Under both federal and Illinois law, notice of a security interest in farm products must be provided within one year of a sale in order to protect your bank’s security interest, and we are aware of at least one Illinois case holding that this notice lapses after one year.

For resources related to our guidance, please see:

• Food Security Act, 7 USC 1631(e) (“Purchases subject to security interest. A buyer of farm products takes subject to a security interest created by the seller if (1)(A) within 1 year before the sale of the farm products, the buyer has received from the secured party or the seller written notice of the security interest organized according to farm products that is an original or reproduced copy thereof; . . .”)

• Illinois UCC, 810 ILCS 5/9-320(f) (“A buyer of farm products takes subject to a security interest created by the seller if: within one year before the sale of the farm products, the buyer has received from the secured party or the seller written notice of the security interest organized according to farm products that: . . . .”)

• First Midwest Bank, N.A. v. IBP, Inc., 314 Ill.App.3d 255, 260 (3rd Dist. 2000) (“[W]e hold that valid notice of a security interest in farm products lapses after one year. . . . To require a purchaser of farm products to abide by one notice forever is an unrealistic, unreasonable burden given the history behind this provision.”)