Almost all dairy products can be graded, but the service is used most widely for butter, Cheddar cheese, instant nonfat dry milk, and regular nonfat dry milk. Inspectors also grade other cheeses, dry whey, dry buttermilk, and dried and condensed milk.

There are three grades for butter: U.S. Grades AA, A, and B. The ratings are assigned on the basis of flavor, body, and color. The quality of the cream from which the butter is made determines the flavor factor in assigning the grades.

There are four grades for Cheddar cheese: U.S. Grades AA, A, B, and C. As with butter, all grades may be used in the wholesale trade, but only the top grade is used at the retail level. To rate the top grade, the cheese must have a consistently fine Cheddar flavor. In addition, there are grades for Swiss cheese, Emmentaler, Colby, Monterey (Monterey Jack), and Bulk American cheese for manufacturing.

If instant nonfat dry milk meets the standard for quality, it may carry the U.S. Extra grade shield. This means that laboratory tests show that it possesses a sweet and pleasing flavor, a natural color, and satisfactory solubility. USDA inspectors also check the instant milk for other quality factors such as moisture, fat, bacteria, scorched particles, and acidity.

Dry buttermilk and regular nonfat dry milk, which are sold in bulk to producers of ice cream, bakery products, and some processed meat processors, can be graded either U.S. Extra or U.S. Standard. The lower grade, "Standard," may be the result of excess moisture or scorched particles from the drying process or certain other quality factors.

The grades of U.S. Extra and U.S. Standard for dry whole milk are based on quality factors like those for other dry dairy products. Grade requirements for dry whole milk also include a maximum bacteria content. Bacteria limits are designed to ensure a safe product that has good keeping quality.

Dry whey--a coproduct in the making of natural cheese--is tested for flavor, appearance, amount of milkfat, and moisture. It must have a good, sweet taste to earn the U.S. Extra grade. Whey of this top quality is desired by manufacturers because it is used as an ingredient in other foods.

For cottage cheese, processed cheese, cream cheese, or any other dairy product for which no U.S. grade standards have been established, there is a USDA program for official quality approval. Such products may earn the "Quality Approved" rating, which is based on a USDA inspection of the product and the plant where the product was made. The product must be wholesome and measure up to a specific level of quality to earn the rating. The "Quality Approved" shield may be used on retail packages.