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JOHN C. PIERCE The Federal Grading System for Animal Products This chapter will deal with what the market grading system for animal products is supposed to do, how well it performs its function, and the possible role of grades in changing the fat composition of animal products. Within the red-meat category, active grading programs exist for veal, calf, beef, lamb, and mutton. Virtually no pork is federally graded. Primary emphasis will be on beef, since it constitutes about 98% of the tonnage of grading performed. Also, the basic approach to developing standards and carrying out the grading function can be illustrated by beef. The first consideration is the basic objective of the grading system. The legislative authority for grading gives some insight into its function in the marketing system for agricultural commodities. The most recent applicable legislation relating to this function is the Agricultural Market- ing Act of 1946, which authorizes and directs the Secretary of Agricul- ture to develop and improve standards of quality, condition, quantity, grade, and packaging and to recommend and demonstrate these stan- dards to encourage uniformity and consistency in commercial practices. It also authorizes and directs the Secretary to inspect, certify, and identify the class, quality, quantity, and condition of agricultural products and to collect such fees as may be necessary to cover the cost of the service rendered to the end that agricultural products may be marketed to the best advantage, that trading may be facilitated, and that consumers may be able to obtain the quality of product they desire. The Act provides further that a grading service shall be financially self 183

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84 JOHN C. PIERCE supporting, that its use shall be voluntary, and that no one shall be required to use such a grading service. Thus, the basic role of grading is to expedite the marketing process. Grading can be defined broadly as a method of classifying or group- ing units of a commodity so that the variation in characteristics affecting market acceptability and value is smaller within a grade than over the entire range of the commodity. The number of grades for a particular commodity generally differs with the range of variability to be measured. The width of a grade should be sufficiently broad to contain a workable or marketable supply and yet sufficiently narrow so that the units within are relatively interchangeable in the marketing process. A brief background on the evolution of beef grading may serve to illustrate its basic purpose. In our present era of consumerism, one might assume that beef grading was instituted at the request of con- sumers or others directly involved in the buying and selling of beef, such as retailers or meatpackers. However, the U.S. Department of Agriculture was urged to begin a federal grading program for beef by a group of some 250 producers, known as the Better Beef Association, who felt that grade identification would increase consumer confidence in beef, stimulate increased sales of preferred grades, and indirectly en- courage the production of improved beef cattle. In effect, they were looking for a system that would reflect consumer preferences back through the marketing channels to the producer and serve as a guide in his production plans and actions. Beef grades are not based on nutritive values or specific fat levels. More likely, consumers purchase beef and other meat products pri- marily because of their palatability because they like them. Market value differences in beef are associated with the palatability of the lean and with the proportion of the carcass weight that the lean represents. To reflect these two considerations, we nave two kinds of grades for beef: quality grades and yield grades. The quality grades identify beef for differences in palatability-tenderness, juiciness, and flavor. Eight grades are used to identify the quality range of beef marketed-Prime, Choice, Good, Standard, Commercial, Utility, Cutter, and Canner. The available research on beef palatability indicates that marbling (the flecks of fat within the lean) and maturity (roughly the age of the animal at time of slaughter) are the two most important factors affecting beef palatability that can be used in grading. This research indicates that increasing maturity, from young to old, adversely affects overall palatability; additional marbling is associated with improved palat- ability.

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The Federal Grading System for Animal Products 185 The yield grades, numbered 1 through 5, identify beef carcasses and cuts on a quantitative basis. They measure differences in the yield of trimmed retail cuts from the carcass, regardless of its quality grade. These variations are predicted by using measures of fatness and muscling. Although the yield grades have significant effects upon carcass value, these differences are important primarily in trading between the producer, the meatpacker, and the retailer. The identification does not carry through to the consumer-buyer, as do quality grades, because the consumer normally purchases trimmed, ready-to-cook cuts. How well do the beef grades serve their purpose? How accurately do they measure differences in eating quality and differences in the yield of salable meat from a carcass? The principal criteria used in the quality grades, as already mentioned, are marbling and maturity. Differences in eating quality in beef are very pronounced. However, the identifica- tion of factors affecting tenderness, juiciness, flavor, and overall palat- ability has proved to be difficult. Marbling and maturity have con- sistently proved to be the two most useful characteristics, but additional indices are needed to more accurately account for the variability in eating quality. Since cattle coming to market vary greatly in genetic makeup, feeding, and management, it is not surprising that character- istics that can be quickly and subjectively evaluated in a grading pro- gram have not provided as precise a measure of eating quality as would be desired. Accordingly, there is an overlap in the eating quality of the various grades, but also a pronounced trend for higher palatability ratings in the higher grades. Hopefully, research will eventually identify other characteristics that may be useful in a grading program for pre- dicting eating quality. Yield grades are based on the research results of Murphey et al. (1960), which indicate that about 80% of the variability in cutting yields can be explained by the criteria used in the grading system. The practical usefulness of yield grades for identifying differences in cut- ability is enhanced by the fact that most of the factors used to determine yield grades can be readily measured by objective means to substantiate the accuracy of their application. Grading merely provides product identification. The importance of the characteristics being identified and the effectiveness of that identifica- tion in expediting the marketing process are measured to an extent by trade usage. Meat grading is a voluntary service and is supported by The fees charged the users. Consequently, meatpackers and other users pay to have beef graded only when they can sell it to better advantage with a grade stamp than without one. Beef grading has grown sub- stantially since about 1950. This, of course, has been paralleled by a

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186 JOHN C. PIERCE period of greatly increased beef production, particularly fed beef. An increasing proportion of beef produced since 1950 has qualified for the Prime and Choice grades. Per capita beef consumption has doubled since 1951, and the volume of beef graded has increased more than fivefold. We estimate that 80%-85% of the fresh beef cuts sold at retail are federally graded. The volume of Choice beef steadily increased in recent years and became the dominant grade; about 6% of the beef quality graded has been Prime, 80% Choice, and 12% Good. Lower- quality beef is primarily used in processing or manufacturing, and very little of it is graded. Beef grades have made their most important contribution in establish- ing essentially a national market for beef. They serve as a common denominator for transmitting signals about demand, which makes possible more precise production planning. The grademark also serves as a basic guide for consumers in selecting beef, but it should be pointed out that many consumers are still unfamiliar with the grade terminology. Yet, through retailer reliance on them, grades play an important role in satisfying consumer demand for a consistent, uniform quality of meat. Consumers tend to purchase beef in a store that supplies a consistent quality at competitive prices. The ability of retailers to buy graded beef nationwide without the necessity of personal selection not only reduces a direct marketing cost but also contributes to making the market for beef national in scope. Federal grading opens sales outlets to packers on a national basis virtually from the day a plant begins production. This, in turn, provides additional competition for the producer's cattle from new, as well as old, and from small, as well as large, packers. Thus, beef grading has proved to be workable and useful in expediting the marketing process. What about reducing the fat content of our meat? Fortunately, not all consumers prefer beef of the same composition. It is rather clear, however, that consumers generally have shown an increasing aversion to excess fat on meat for several years. The production of excess fat has made it necessary for retailers to trim larger and larger quantities of fat from meat cuts in order to satisfy discriminating buyers. For 1973, it was estimated that the cost of producing, shipping, and trimming the excess fat on beef alone was more than $2 billion. Most of the wide range in total fat composition of beef carcasses is caused by trimmable fat, and much of it is removed in preparing retail cuts. The yield grades provide a useful measure of this variable. For example, the fat trimmings necessary to make closely trimmed retail cuts vary from 7~/2% in Yield Grade 1 carcasses to 28% or more in Yield Grade 5. Although differences in fat content of the lean are sub

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The Federal Grading System for Animal Products 187 stantial, they are of considerably less magnitude. The fat content of different muscles varies and, as reported by Doty and Pierce (1961), the fat content of different locations within the same muscle varies. The studies of Garrett and Hinman (1971) indicate that most carcasses graded low Choice and Good typically contain less than 5% fat in the large, trimmed, uncooked muscles from the rib, loin, and round. Un- published data of the Livestock Division, Agricultural Marketing Service, U.S. Department of Agriculture, indicate that about two thirds of the beef qualifying for the Choice grade would be classified as low Choice. The fat composition of beef can be reduced in many ways. Fat both external and intramuscular-is considered to be the result of high- energy rations. The economic situation in recent months has drastically changed the meet: "rain price ratio. If these conditions continue for an extended period, they undoubtedly will influence the fat content of beef. To date, they seem to have had little effect on the total fat content of beef, although there has been some reduction in the proportion of the supply that qualifies for the Prime and Choice grades. Reducing the fat content of beef by changing breeding stock has considerable potential. Many carcasses in coolers qualifying for the Prime and Choice grades that have only a thin, external fat covering are thickly muscled and require little trimming in making retail cuts. On the other hand, there are Good and Standard grade carcasses with an inch or more of outside fat that must be trimmed to make acceptable cuts. Therefore, there is a broad opportunity to select cattle with the genetic ability to produce thickly muscled carcasses with little excess fat but with the marbling and other characteristics associated with tender, juicy, flavorful beef. Accurate market identification of these character- istics in both cattle and beef and equitable price incentives for producing meatier cattle would speed the improvement of cattle. Such identification would bring more sharply into focus the wide differences in fatness and muscling in beef supply. To assist in cattle-improvement efforts, the USDA provides a beef-carcass data service that makes it relatively easy for breeders and feeders to get detailed carcass information on the cattle they produce. The potential use of grades particularly nonmandatory grades- to arbitrarily reduce the fat content of beef has very practical limitations. Since the grades are voluntary, the extent of their use would vary with their precision in providing the identification that is important to those using grades in the marketing and merchandising of beef. Pronounced consumer preference for lower fat composition of beef would likely evoke an equally pronounced effort of cattlemen to produce more of this type of beef particularly under present conditions with relatively

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188 JOHN C. PIERCE high feeding cost. Thus, a change in the grade standards would be logical if a pronounced change in consumer preferences or a general change in the type of beef marketed was evident. However, a drastic change in fat content of the various USDA grades appears unlikely in the short range. A USDA proposal is under consideration that would ac- complish slight reductions in the average fatness of the Prime and Choice grades. Comments on the proposal from both consumers and those selling meat directly to consumers appear to be predominantly in opposition to the change. In the longer range, economic and nutritional considerations can, and likely will, lead to a reduction in the overall fat content of our beef. Grades can help in this transition by filling their traditional role of providing useful market identifications. But they are not likely to exercise a direct effect and lead the way to reduced fat levels. Rather, the identification that grades provide makes it easier for other market forces to produce the change. REFERENCES Agricultural Marketing Act of 1946. 7 U.S.C. 1621-1627. Doty, D. M., and John C. Pierce. 1961. Beef Muscle Characteristics as Related to Carcass Grade, Carcass Weight, and Degree of Aging. USDA Tech. Bull. No. 1231. Garrett, W. N., and N. Hinman. 1971. The fat content of trimmed beef muscles as influenced by actuality grade, yield grade, marbling score and sex. J. Anim. Sci. 33:948. Murphey, C. E., D. K. Hallett, W. E. Tyler, and J. C. Pierce, Jr. 1960. Estimating yields of retail cuts from beef carcasses. J. Anim. Sci. 19:1240. (A)