The USDA has developed its shields as a way to convey the quality of beef. The USDA grade shields are highly regarded as symbols of high-quality American beef. Quality grades are widely used as a “language” within the beef industry, making business transactions easier and providing a vital link to support rural America.
Its important to note that NOT all meat sold in the US is graded. The process of grading meat is voluntary and the service is requested and paid for by meat and poultry producers/processors.
Its also important to note, that the US Department of Agriculture regulates the use of the terms USDA Prime, USDA Choice and USDA Select. As long as you do not use the words USDA... you are not breaking any rules.
Beware of marketing from the unscrupulous. Some supermarkets may try to fool an unsuspecting consumer by using the words "prime" and "choice" without being attached with the official "USDA shield". Unless prime and choice carries the USDA label, what you are buying may not be the real thing.
So about the grading:
USDA Prime beef is produced from young, well-fed beef cattle. It has slightly abundant marbling (the amount of fat interspersed with lean meat), and is generally sold in upscale restaurants. Only about two percent of all beef graded by the USDA qualifies for Prime distinction.
USDA Choice beef presents moderate marbling. Choice beef is a good economic alternative to USDA Prime. Slightly less tender, less juicy and a bit more coarse than prime. Typically found in grocery stores and some of the best steak house restaurants. Best for grilling.
The upper echelon of Choice sits just a shade below Prime, while the lowest tier sits right above the Select grade.
Do note that... at home, the difference between Prime and high Choice is about 70% your cooking method—if you can perfect your char and cook it right, you're not going to notice much difference.
Select is a uniform, leaner quality of beef. It still is tender and can provide pleasurable eating experiences, having less marbling Select beef is going to tend to be less juicy and tender than Prime or Select. Most often select cuts are either marinated or braised to achieve the most eating satisfaction.
There are grades lesser than USDA Select. USDA Standard and USDA Commercial are very lean with little fat. Very tough. Derived from older cattle. Not ideal for grilling at all. Cheap. When sold in stores this quality is typically ungraded by the USDA. Utility, USDA Cutter and USDA Canner grades are almost void of any fat and are sourced from much more mature cattle. They are typically used in processed meat products, canned meats and some low-cost frozen dinners.