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U.S. Grade Butter
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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.

http://www.ams.usda.gov



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