Economic and Marketing Information
FOR INDIANA   FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana
The   Current   Beef   Grading   Controversy
by R. E. Schneidau, Agricultural Economics
On July 1, 1962, the USDA proposed a one year trial
period for a new carcass beef grading system. It was
called Dual Grading, and was offered to packers using
federal grading on a voluntary basis. During the one
year period ending June 30, 1963, only 3 per cent of
federally graded beef was dual graded and about one-
half of this was purchased by agencies of the federal
government.
The system was not adopted at the end of the trial
period, but another proposal modifying the current carcass beef grades (USDA, prime, choice, good, standard,
commercial, utility, and cutter) was announced. The new
proposal is essentially the same as the original conception
of dual grading with the major exception that the most
recent proposal may be put on a mandatory basis.
What is Dual Grading?
Dual grading is based on two factors which influence
the value of beef: (1) quality as reflected by tenderness,
juiciness and flavor of the meat and (2) proportion of
high-value preferred cuts obtainable from the carcass.
Under the most recent proposal by the USDA, the
quality grade (prime, choice, etc.) would remain unchanged. In addition each carcass would carry a yield
or cutability grade indicative of the percent or yield of
boneless, closely trimmed retail cuts obtainable from the
round, loin, rib, and chuck. These cuts represent more
than 80 percent of the retail value of the carcass. Grade
numbers 1 through 5 would represent the cutability grade.
Number 1 would indicate the highest yield of these cuts
and 5 the lowest. Thus a carcass might be graded USDA
choice, but carry a cutability grade of anywhere from
1 through 5.
The yield grade can be determined with a high degree
of accuracy by evaluation of: (1) thickness of fat over the
rib eye, (2) size of the rib eye, (3) quantity of kidney
and pelvic fat, and (4)  carcass weight.
Why Further Refine the Grading System?
The USDA has shown that in extreme cases the retail
value of two choice carcasses weighing the same might
vary by more than $100 in value. Differences of $25
to $35 are not unusual. Thus at the farm market level
two slaughter steers, both grading choice and weighing
the same might be worth as much or more than $7 per
cwt. difference. It is felt that our graditig system should
reflect this fact to a greater degree.
Studies by the USDA indicate variations in cutahilitv
can be recognized with a very satisfactory degree of
precision in live cattle. To the extent that the market
does not already reflect these value differences, greater
value  differentials  within  grades  would   result.
Producers of high quality and yielding (high cutability) animals would benefit. Some people feel that producers of less highly finished western type cattle would
benefit at the expense of feeders of highly finished cattle
in the cornbelt region. In any case, it is hoped that producers would be paid for their cattle more nearly in
line with the ultimate value at the retail-consumer level.
Such a system might serve as an incentive to beef
producers to turn out more meat-type animals more
closely in line with consumer desires. If such a system
is workable it should help the industry by continuing
to expand  the demand  for  high  quality  beef.
Some Reservations
1. Packers state it is an unnecessary and unwanted addition since only 3 percent of federally graded beef during the 1962-63 trial year was dual graded.
2. Most buyers (at least quantity buyers I already have
their own specifications.
3. Differentials within grades already exist, and the
price system is doing its job as well as can be expected.
4. An additional cost would be involved for mandator)
cutability grades since more time is involved in grading.
Ribbing the carcass in the manner prescribed is a time
consuming and costly task. Some packers may need another grader if a good job is to be done.
5. Graders cannot estimate the cutability grade close
enough. A representative of one of our largest chains
recently stated that in a test they ran, only 50 percent
of the dual graded beef they bought actually fell in the
cutability designation indicated—that they were not interested in purchasing by this grading system—that they
had their own specifications. Another study conducted
in   Illinois indicates  a similar low  degree of accuracy.
In summary, the proposed grading system is designed
to more nearly reflect consumer desires and value throughout the marketing process. However, it remains to be
seen whether such a system can or will be made workable.