Typically when beef is graded, it's done by the side. The forequarter is separated from the hindquarter between the 12th and 13th rib. USDA inspectors determine the grade using a number of factors - conformation, quality and marbling.
While I've never seen grading done on site, I'm guessing the sides of beef are rolling past the inspectors at a quick clip. Making the determination to stamp Prime, Choice or Select comes (I'm guessing) with years of experience. No doubt (I'm guessing again) what might pass for Prime, on the low end of the grade by one inspector, might pass for Choice by another. The same probably holds true with lower end Choice vs Select.
In any case, Cal found a nice brisket. You can see the abundant fat striations in the flat and point up by the nose. At $2.48 @ lb...it's a steal