  BeefTalk:
Yield Grade Affects Beef Pricing Scales
By Kris Ringwall, Extension Beef Specialist,
NDSU Extension Service
Producing beef the consumer wants has been heralded by many, yet most
consumers are quite removed from the beef business. Consumers, as the actual end
users, have, in a sense, defaulted to the packer to provide the kind of beef
wanted. As a result, today’s commercial cow calf producer needs to understand
the pricing structure for the finished beef product, which is essentially
purchased by the packer.
Astute producers understand this relationship with the packer as a primary
focus in beef. At the same time, producers realize the major drivers in the
price received for finished beef are quality and yield grade.
For generations, cattle have been harvested for the purpose of providing red
meat and white meat (fat). In recent times, the focus has been red meat, putting
the maximum pounds of red meat on the rail and ultimately in the retail counter.
This can be measured in several ways, but the most common is in calculating a
yield grade for each carcass.
Yield grades, which calculate a common way to label a carcass as to the
amount of red meat available, are listed as 1, 2, 3, 4 and 5. Yield grade
estimates the amount of boneless, closely trimmed retail cuts from the round,
loin, rib, and chuck. This indication of the yield of red meat within a carcass
allows for the subsequent pricing of the carcass (i.e., yield grade 1 carcasses
are expected to yield greater than 52.3 percent closely trimmed boneless retail
cuts (percent CTBRC) while yield grade 5 yields less than 45.4 percent CTBRC,
according to the BEEF FACTS from BEEF USA).
Four main carcass points are measured to calculate yield grade:
- Fat. The amount of fat on a carcass is an obvious "need to know" number to
estimate value for a preliminary yield grade. Fat thickness is physically
measured, by cutting the carcass between the 12th and 13th rib and moving away
from the backbone, to approximately three-fourths the distance across the rib
eye. The amount of fat is measured in tenths of an inch.
A yield grade 2 has zero fat. A yield grade 3 has four-tenths (.4") of an
inch fat thickness. A yield grade 4 has eight-tenths (.8") of an inch fat
thickness. In the current market, yield grades of 4 are undesirable and
discounted on price. There are indications that the upper yield grade 3’s may be
discounted in the future. Packers do not buy fat, and add premiums to the yield
grade 2 and discount the yield grade 3.
- Hot carcass weight.
- Rib eye size. This measurement establishes the proportion of rib eye
relative to the hot carcass weight. Minimum hot carcass weights are required: a
600-pound carcass needs an 11 inch square rib eye; a 650-pound carcass needs
11.6 square inches.; a 700 pound needs 12.2 square inches.; a 750 pound needs
12.8 square inches; and an 800 pound needs 13.4 square inches. The USDA grading
standards set these weight increment requirements.
Rib eye measurement excesses or deficiencies impact the preliminary yield
grade in increments of three-tenths (.3). A carcass short 1 square inch of rib
eye has an increase on its yield grade of three-tenths (.3); a carcass 2 square
inches short has an increase in yield grade of six-tenths (.6), etc. Excess rib
eye results in a decrease in yield grade, which has a positive price impact of
the same magnitude.
- Percent kidney, pelvic and heart fat. As one would expect, the greater
amount of fat, the higher the impact. The adjustment to the preliminary yield
grade usually ranges from a minus five-tenths (.5) to a positive one-tenth (.1).
Packers and ultimately the consumers want cattle that finish with less than
four-tenths of an (.4") inch back fat to assure a preliminary yield grade of 3.
They also want a greater rib eye than required. Lacking even one square inch of
rib eye will increase yield grade a third of a grade, which is not the direction
to go. Keep reading about yield grade; the more you understand, the better you
are positioned.
May you find all your ear tags.
Your comments are always welcome at
www.BeefTalk.com. For more information,
contact the North Dakota Beef Cattle Improvement Association, 1133 State Avenue,
Dickinson, ND 58601 or go to
www.CHAPS2000.com on the Internet. In
correspondence about this column, refer to BT0173.
###
Source: Kris Ringwall, (701) 483-2427, kringwal@ndsuext.nodak.edu
Editor: Rich Mattern, (701) 282-2448,
richard.mattern@ndsu.nodak.edu
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