The information provided comes from the Coffee Research Institute's website (coffee research.org).
Grading Coffee Beans:
Grade 1: Specialty Grade Coffee Beans: no primary defects, 0-3 defects, sorted with a maximum of 5% above and 5% below specified screen size** or range of screen size, and exhibiting in one or more of the following areas: taste, acidity, body or aroma. Zero quakers* allowed. Moisture content between 9-13%.
Grade 2: Premium Grade Coffee Beans: Same as Grade 1 except maximum of 3 quakers. 0-8 full defects.
Grade 3: Exchange Grade Coffee Beans: 50% above screen 15 and less than 5% below screen 15. Max of 5 quakers. Must be free from faults. 9-23 full defects.
Grade 4: Standard Grade Coffee Beans: 24-86 full defects.
Grade 5: Off Grade Coffee Beans: More than 86 full defects.
*Quakers refers to unripened coffee beans, often with a wrinkled surface. They do not darken when roasted.
**Screen size refers to sorting the green beans by their size. The theory behind this is that coffees of the highest altitudes are more dense and larger in size than at other altitudes. Higher altitude coffees have the best flavour profiles. This correlation has numerous exceptions and size classification should only be used to verify that they coffee lot is uniform in size which helps to ensure a uniform roast.