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Carcass yield grades on the decline

A close look at what’s behind the shift to lower yield grades in recent years and how the industry might reverse the trend

I have kept an annual record of grade and yield statistics since 1993 when a new grading system was introduced. It tells quite a story. I begin with the quality grades.

One can see that the percentage of “Canada AAA” carcasses was below 20 per cent in 1993 and that the AA and A grades accounted for about 80 per cent of the total.

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The revised grading system in 1993 followed an earlier system that placed far too much weight on leanness and not enough attention to quality. There was a requirement for at least a minimal amount of marbling but no standard higher than that. Thus when the new system was launched there was an immediate increase in the proportion of AAA and Prime carcasses.

This was not surprising because the grading system before 1993 was based primarily — I could say entirely — on leanness. This was not the intention and a little history is necessary to explain why.

Prior to 1972, when the first major change was made in the grade standard, the industry was labouring under the burden of excess body fat on fed cattle. It was generally believed that heavy fat cover was necessary to ensure quality. So, a system was introduced that was based on fat thickness as measured at the point between the 11th and 12th rib. This required “ribbing” of the carcass and for the first time the grader, packer and beef buyer got to see the cut surface of the Longissimus dorsi muscle and were able to measure the fat thickness.

For fed cattle four grades were provided: Canada A1, A2, A3 and A4. A1 carcasses were those with a fat thickness of five to 10 mm. (I am converting from fractions of an inch to millimetres for the sake of consistency). A2 carcasses were those with 11 to 15 mm. A3 were those with 16 to 20 mm and A4 included carcasses with 21 mm or more of fat cover. There were slight variations based on carcass weight but the above is sufficient for this discussion.

Carcasses were required to have a minimal degree of marbling but as time passed less and less attention was paid to marbling. I can state this because the destination of insufficiently marbled carcasses was the Canada C grade and as the years went by fewer and fewer carcasses were graded C. This trend was so strong that the C grade was not included in the new grading system introduced in 1993.

Simply because the leanest carcasses were graded A1, the perception grew that this was the top grade. This was not the intent but the designers, including me, naively intended that we would simply describe the carcass fatness and let the trade determine their own preferences. This was not the case and the A1 grade became the dominant grade.

By the early 1990s it became all too evident that beef quality was declining and that a new system was necessary to reintroduce quality characteristics in the form of varying levels of marbling. The planners then decided, quite rightly, that the industry needed a dual grading system that was to categorize each carcass as to both its quality and yield.

That explains why Triple A carcasses represented less than 20 per cent of the total in 1993. The entire industry had been focused so long on leanness, and therefore yield, that most carcasses were poorly marbled. That was about to change.

From 1993 onward, AAA carcasses grew steadily. In 1997, we introduced the Canada Prime grade. The combination of Canada Prime and Canada AAA broke through the 40 per cent level in 1997, passed the 50 per cent level in 2009 and went above the 60 per cent level in 2015.

If this were the only story to tell it would be a wonderful story indeed. But it isn’t!

Yield declines

As quality advanced, yield declined. The decline was not as dramatic as was the increase in AAA carcasses, so it looked like the industry was improving quality while maintaining high yield simultaneously. This was true until about 2005.

However, from 2005 onward the proportion or Y1 carcasses began a steady decline, which you can see in the yield class chart. Because the five-class yield system was introduced in 2019, this chart ends in 2018, as comparisons with 2019 data would be misleading. This applies as well to the chart showing the proportion of carcasses that were Prime or AAA as well as Y1.

It is not necessary to argue that the best carcasses, for most purposes, are those that combine high quality with high yield. So, the obvious question is, what percent of carcasses were graded both AAA or better and were also Y1?

From 1993 to 2005 there was a steady increase from just 10 per cent of carcasses to a peak of 25 per cent that met those standards. Twenty-five per cent may be a disappointingly low number, but it at least proves that producing carcasses that are of both high quality and high yield is entirely possible. Furthermore, this was accomplished without any price signal that high yield was desirable.

But instead of building on this progress, emphasis has shifted strongly to focus on quality and the percentage of carcasses that combined best quality with best yield commenced a long decline. In 2018 fewer than one carcass in six graded as both AAA or better for quality and Y1 for yield.

Broadly speaking, the industry pays little or no attention to the lean meat content of a carcass. This is surprising when the most basic purpose of the entire industry is the production of high-quality muscle meat. But this is not surprising when there are no obvious price signals at any level in the production chain that would reward cattle feeders and cow-calf producers for producing a higher proportion of high-quality and high-yielding carcasses.

Stated more bluntly, the industry today is producing a product that is inferior to what was accomplished 15 years ago.

Another reason to pay more attention to yield is that feed costs rise rapidly after cattle reach the optimal finishing level. For an industry striving for sustainability and searching for profit, feed efficiency is important.

A way forward

The industry has now adopted something very similar, if not identical, to the five-yield class system in the U.S. That was a baby step on a long road. But it is now possible to measure yield to the actual percentage, as in 75 per cent, for example. So why are we still messing about with yield classes when we can determine the per cent yield of every carcass?

Since we now have a dual grading system, albeit in name only, it would be a good idea to present grading data in that format. The tables below showing grade and yield combinations for 2005, 2018 and 2019 do just that. I present the 2018 data because it is more comparable with the 2005 chart as both are based on the original three yield classes. The 2019 table is, of course, based on five yield classes.

The essence of my argument is that the industry can return to the level of excellence reached in 2005. The remarkable thing about 2005 is that despite little attention being paid to yield, one out of every four carcasses were both Y1 and AAA or better. A closer look shows that over 62 per cent of carcasses were AA, or better, and Y1. The comparable figure for 2018 was 35 per cent.

If the industry could do what it did in 2005, without any apparent encouragement, think of what might be possible if there were a reasonable price incentive to encourage both high quality and high yield.

Note: This article is based on Gracey’s own thorough research and analysis, and may not reflect the position of organizations involved in this issue. This is a condensed version of the original article, which can be found at charlesgracey.net.

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Charlie Gracey is a beef industry analyst. He can be contacted via email at [email protected]

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