Economics of Increased Beef Grader Accuracy

USDA grader called yield grade was compared to a calculated yield grade based on ribeye area and fat thickness measured by trained technicians. The predicted yield grade from the measurement was contrasted with the called yield grade distribution for two different time periods (January 2000- June 2003 and July 2003 - June 2006) to see if the graders accuracy in predicting yield grade had changed with the incorporation of an additional grader to the line. Grader accuracy did increase significantly with additional time to evaluate carcasses. A buying grid currently used by the industry was used to analyze the effect of the graders errors on the expected values of the premiums on both periods and by yield grade. The higher accuracy affected all yield grades, but most notably it resulted in more called yield grade 4 and 5 carcasses. As a result, grid premiums and net prices paid to producers decreased as graders tended to error toward the middle of the yield grade distribution, i.e., more Yield grade 3 and less 1's and 4's