South Dakota law sets rules for crop-processing liens

The law gives qualifying farm machinery operators a lien for the value of crop processing work. It covers people who own or lease and operate farm machinery to process crops, such as by threshing, cutting, or baling. This provision takes effect July 1, 2027. To perfect the lien, the operator must file within 60 days after finishing the work.

A customer who wants to sell or consign the processed crop before the lien filing period ends must notify the buyer or consignee if the processing debt is unpaid. This applies when the person who hired the processor wants to sell or consign the crop before the time to perfect the lien expires. If the lienholder agrees in writing to a sale or consignment within 60 days after processing ends, and no financing statement has been filed, the lien does not attach to the crop or proceeds unless the lienholder gives the buyer written notice before the purchase. Sections 1 to 5 take effect July 1, 2027. The notice duty applies before the time to perfect the lien expires; the separate sale rule covers sales or consignments within 60 days after processing ends.

A lien claimant must file a sworn financing statement and start a court action on time to protect and enforce the lien. These rules apply to liens for the crop processing work covered by the law. The statement must identify the claimant, the customer, the amount owed, the crop and its location, and when the work began and ended; the claimant must give the customer a copy when filing. If the claimant does not start an enforcement action on time, the lien ends, and the customer may seek to remove the filing from the record. The filing deadline runs from the end of processing. The deadline to start an enforcement action runs from the filing date.