Beef grades were adopted in 1926 and were given a free one-year trial period in 1927. Packers claimed that it was not a practical program, but producers and feeders had formed the Better Beef Association which lobbied to get the program implemented. The grading service got a huge boost from federal price controls which made grading mandatory during World War II and the Korean Conflict. Grading allowed local packers to compete with national brands. Unlike inspection, grading is required by law to be financially self supporting.
Processors pay the cost of grading.
Fees for meat grading have not changed since 1993. Since then the AMS has closed three field offices and reduced the mid-level supervisory staff by more than 50 percent and support staff by 38 percent. However, Congressionally mandated salary increases for federal employees, inflation of operating costs and the cost of becoming Y2K compliant has become too much. Such a change should not affect the consumer but will take a chunk out of packers profit margins. Changes in the meat grading system over the years have been influenced by government and industry research, consumer research and lobbying groups which make it difficult to know whether changes have been improvements.