Look at the numbers commonly used to gauge industry trends in carcass quality and it's easy to conclude that fewer cattle are grading Choice.

For instance, if you look at USDA's historical meat grading summary, 56.2% of cattle graded Choice last year compared to 60.4% a decade earlier, and 93.6% in 1986 (see ranges, Table 1). During the same time, 40.9% of the carcasses graded Select last year, compared to 37.1% in 1996 and 2.8% in 1986, when today's Select grade was known as Good. This was despite the fact that more genetic focus was aimed at increasing the percentage of Choice cattle.

But the conclusions drawn from these numbers are misleading, according to researchers at Texas A&M University (TAMU).

“There is little evidence that the increase in Select beef output has been the result of declining amounts of Choice beef produced,” explains Ryan Rhoades, a TAMU graduate research assistant in beef production. “Increases in the amount of Select beef produced result from the increase in the proportion of beef that is presented for grading.”

Huh?

It's not that the previously reported figures are lying. Rather, it's that the most commonly presented ones represent something different than lots of folks realize.

Specifically, Jason Sawyer, TAMU beef specialist who also worked on the project, explains historical USDA data are most often expressed as a proportion of the product graded, rather than as a proportion of the total produced. That realization isn't new, but this is the first study to quantify the effect.

“Let's say half the cattle out there have the ability to grade Choice, and I'm choosing the ones I believe will grade Choice,” Sawyer says. “Of that population, suppose I only select about half to present for grading. Even if I'm wrong 10% of the time, 90% of the ones I present for grading are still going to grade Choice, although the population only produces 50% Choice carcasses.”

That's not far off the percentage of Choice-grading cattle — as a proportion of cattle presented for grading — that was routine through the 1980s, when quality grading and yield grading were still coupled, and before changing the name of Good quality to Select (in 1987) had much impact. As recently as 1988, only about 56% of the federally inspected beef slaughter was graded because there were no economic incentives to present cattle that might not grade Choice.

“During the late 1970s and early '80s, there wasn't much distinction between beef grades; it was either Choice or Prime, or it was just beef,” Sawyer says.

But today, Rhoades points out only about 15-20% of carcasses harvested go un-graded (no-roll). Mathematically, that means a lower percentage of the cattle graded are grading Choice, based on those same USDA statistics. However, that doesn't mean the overall proportion of Choice-grading cattle is dwindling.

Quality distribution is stable

When you express grading percentages as a proportion of all cattle harvested, rather than as a proportion of only the cattle graded, the percentage of cattle grading Choice has remained fairly stable during the past decade (Figure 1); the same goes for cattle grading Select (Figure 2).

Perhaps the most glaring example of how the picture changes based on how the grading percentages are calculated can be seen between 1986 and 1996. Looking at USDA figures — based on only the cattle graded — you'd say Choice beef production declined 35%. Base it on all cattle harvested though, and there's little change.

Lending support to this alternative way of expressing percentages is what TAMU researchers uncovered relative to the elasticity of beef demand associated with Choice and Select grades.

In the short term (52 weeks May '06 to May '07), demand for Choice product is inelastic, while the demand for Select product is relatively more elastic in nature, say the researchers. That means consumers tend to demand Choice beef at more constant levels, despite price, whereas the more elastic demand for Select has consumers demanding more when prices decline and visa versa.