Relative Importance of Weight, Quality Grade, and Yield Grade as Drivers of Beef Carcass Value in Two Grid-Pricing Systems

This study examined the relative importance of carcass weight, quality grade, and yield grade for establishing beef carcass value in 2 grid-pricing systems without the influence of large discounts for nonconformance. A data set consisting of carcass records for 2,000 cattle was constructed to closely approximate carcass weight and grade characteristics of the U.S. fed cattle population. Two beef car-cass-pricing grids-a quality-based grid and a yield-based grid, simulating actual commercial beef-pricing systems-were used for the analysis. Grid prices were computed for individual carcasses at each of 3 Choice-Select spreads ($5.00, $10.00, and $20.00/45.4 kg), and step-wise multiple regression was used to compare the relative importance of weight, quality grade, and yield grade for determining carcass value in both pricing systems. For both grids, carcass weight was the single most important driver of carcass value per head, accounting for 70 to 90% of the variation in total revenue per head when the Choice-Select spread was <$10. As the Choice-Select spread increased, the importance of weight as a value-driver decreased, and the importance of carcass quality grade performance increased. Quality grade was the second most important driver of grid value, accounting for about 8 to 9 times more variation in revenue per head than yield grade when the Choice-Select spread was $20. Yield grade played a minor role in both pricing systems, accounting for <10% of the variation in total revenue per head. Relationships of grid-price signals and beef carcass marketing trends are discussed.