Excerpts from the report Summary: For more than three decades the Department of Agriculture has offered a Federal grading service for lamb and mutton carcasses. During recent years about two-fifths of all the lamb and mutton produced in the United States has been federally graded. This service is provided on request and paid for by those who use it. Federal grades have an important positive effect on lamb marketing. They promote competition among buyers, among sellers, and between buyers and sellers. They facilitate trade and may lower total marketing costs. Both of these forces tend to prevent packers and retailers from, widening margins at the expense of their suppliers and consumers. Federal grading helps the pricing system direct production by rewarding the producers of desirable lambs relative to producers of lambs that are less desirable from the consumer's point of view. Although Federal grading does not affect all segments of the lamb industry equally, the net impact appears to be favorable from, the public interest and overall industry points of view.