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Yates, Lawrence - AMS

From: Close, D (Don) <Don.Close@raboag.com>

Sent: Wednesday, November 12, 2014 9:05 AM

To: Yates, Lawrence - AMS

Subject: Comments for US Beef Grading System

Attachments: Grading Changes.pdf

Hello Mr. Yates, 

Please see my attached comments in regards to changes in the US Beef Grading System. 

Don Close 

VP, Food & Agriculture Research & Advisory, Animal Protein

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Rabo AgriFinance 

12443 Olive Boulevard, Suite 50, St. Louis, Missouri 63141 

Phone: (314) 317-8205 Cell: (314) 401-7566

Email: don.close@raboag.com

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Mr. Lawrence Yates

Beef Carcass Revisions

Standardization Branch

LPS Program, AMS, USDA

1400 Independence Ave. SW. Stop 0258

Washington, DC 20250

Dear Mr. Yates,

For the request for open comments regarding the USDA Beef Grading System I 

would like to make some brief comments. Given the time since the last revisions were 

made and the change in fed cattle carcass weights and characteristics, an evaluation of the 

grading system is long over due. I would like to compliment the Grading Service for 

accepting the challenge of making needed updates.

Quality Grading:

Under the current grading system the separation in degrees of marbling from 

small to moderate all falling under the choice category is simply too wide. While the 

intent to get the largest number of carcasses into the highest value possible makes sense 

for the industry, the variation within the choice grade creates too much variability of 

eating quality for consumers.

The broad number of premium labels in the market today are all pulling cattle 

from the top one third to one half of the choice offering and sell at a justifiably higher 

price. Unfortunately, the remaining bottom half of the choice selection that is selling 

under a store banner or commodity product simply does not have the consistency of 

eating quality. As a result consumers are confused and frustrated when they are buying 

beef with a choice label that has so much variation in consistency.

Given the fact that over 70% of the carcasses being graded are Choice or better 

some narrowing of the Choice specifications is needed. This could be accomplished in 

one of three ways. The Prime grade could be expanded into at least a portion of the 

moderate degree. That would increase the number of Prime. An entirely new category

could be added that would fall between the existing Choice and Select grades or the 

Select label expand into the small degree category.

Refined labeling would provide consumers a more consistent eating experience 

within the quality grade they choose to buy. The improved consistency would enhance 

reliability and build consumer confidence in the beef they are buying.

Yield Grade:

While carcass weights have escalated in size over time and especially in the last 

few years, the premium and discount schedule has become increasingly insignificant.

Under this period of tight cattle supplies the need for weight per head and the need for 

more cattle that will grade choice has trumped the disadvantage of an over weight 

carcass. This will not always be the case.
Another factor that has greatly changed the dynamics of yield grades has been the 

escalation in the quantity of beef consumed as ground beef. As a result, the value of 

trimmings in relationship to the carcass or cutout value as a whole has escalated.

Yield grade specifications are in even greater need of updating than are the 

quality grades.

Over the past ten years and during the period that many plants transitioned to 

electronic grading the decision was made to drop the yield grade or to stop reporting 

yield grades in the Weekly Grading Report. 

The loss of timely yield grade data to the market place as a whole has become a 

huge disadvantage to producers. When the yield data was reported weekly, producers and 

or market analysts could track the yield data and make an educated determination if fed 

cattle supplies were in tight supply or when fed cattle supplies were backing up. As a 

result this information enabled producers to determine how aggressive they needed to be 

in marketing cattle. With the current surge in carcass weights and the modern genetics 

that enables the cattle to be taken to heavier and heavier weights the lack of timely yield 

grade data has become even more of an unfair disadvantage to producers. It is critically 

important that weekly yield grade data reporting is returned.

Thank you for considering my perspectives on this important issue. 

Don Close

Rabo Agrifinance

12443 Olive Blvd. Suite 50

Saint Louis, MO 63141

314-317-8205