I posted this in a different post and then thought it might be better served here......
All major slaughter houses are inspected, thus the "USDA inspection" stamp that is on the carcass. This is for public safety, cleanliness standards, etc.
However, having beef "graded" is a choice - no pun intended. If the slaughter house chooses to to have it graded then they have to pay for that. They usually choose to have this done as a higher grading demands a higher price.
But. There is always a "but". Some cattle come in and they know that they will not meet a reasonable grading so they don't even pay for it. Think 20 year old milk cow instead of plump, juicy steer. 70% of the beef we eat come from old milk cows - not beef cattle.
I grew up thinking there were 3 levels of grading - prime, choice, select. I was big time wrong! There are many levels below select. That's why you will actually see some lower end retailers advertising that their meat is "select grade". When old milk cows come in, they don't pay for grading. The typically call it "utility" or "ungraded" if they are selling the tenderloin sections and such but don't mention it when it's ground beef. Religiously slaughtered animals (such as Halal) are usually not graded either. Muslims automatically buy the non-graded Halal beef just like certain people automatically buy the "grass-fed" beef. "Grass-fed" means nothing other that it does not meet the criteria for being called "grain fed". Twenty years ago, "grain fed" was what everyone wanted because it is typically better. Today, ''grass fed" beef is about like people that want eggs from free range chickens raised in free range pens. Go figure.
Just a little FYI from a guy who used to raise beef cattle. BTW, there are two great beef deals out there on the market that most people don't know about. 1) a filet mignon graded "utility" is still tender and tasty if cooked no more than MR. 2) a cut called the "hanging tender" or "hanger steak" or "butcher steak" is very tasty and very tender. I love this cut for kabobs.