There should be no fat on any grilled steak. Period.
There should be no fat layer or fat chunks on a grilled steak, whether or not it is USDA Prime Grade. Any untrimmed fat layer and chunks will burn and taste horrible, and it will harm the taste of the entire steak.
On the other hand, the fat layer and chunks should not be trimmed off a steak which is cooked at a low temperature. In that case, the fat melts and makes the steak juicier and tastier.
Read on for the details and reasons.
Marbling does not refer to the fat layer around a steak or to the large chunks of fat on the interior of a steak.
Instead, marbling refers to the tiny specks and thin streaks of fat in the steak meat. These tiny specks and thin streaks are called "marbling" because they resemble the white streak in Italian black marble.
Marbling itself is made from fat, but it does not mean the thick layer of fat on the outside of a steak or the large chunks of fat that are sometimes found on the inside of a steak.
Marbling is always desirable, but whether the fat layer and chunks are desireable depends on the cooking method.
When steaks are sold by butchers, the fat layer around the steak and the chunks of fat inside the meat itself are rarely trimmed off. There are two reasons for this.
The first is that, since steak is sold by the pound, the butcher wants to increase the weight, by leaving as much fat as possible. Therefore, butchers usually sell steak with untrimmed fat, since it increases their profits.
The second reason is that butchers do not know how you are planning to cook your steak: at a low temperature, or at a high temperature. If you cook at a low temperature, then you will probably want to cook the untrimmed steak. But if you cook at a high temperature, then you will probably trim the steak yourself to remove the outside fat layer and large interior fat chunks.
LOW TEMPERATURE COOKING
If you're planning to cook the steak at a relatively low temperature (e.g. sauteeing at 350F), you want the steak with a thick fat layer and abundant fat chunks. As the steak cooks, the fat layer and chunks melt away into the meat.
When cooked with the fat at a low temperature, the melted fat enhances the juiciness and flavor of the steak meat, and even the remaining steak fat may be eaten and taste good.
HIGH TEMPERATURE COOKING
However, if you're planning to cook the steak at a relatively high temperature (e.g. grilling at 750F), you yourself will have to trim off the fat layer and the big fat chunks in the meat. Why? Because otherwise, when your untrimmed steak is cooked at a temperature over 400F, the fat doesn't melt, it burns.
Beef fat has a "smoke point" of 400F. The smoke point means the temperature at which fat begins to break down. Every fat (including cooking oils and butter) has a different smoke point. When fat exceeds its smoke point, the fat breaks down and takes on a foul odor and taste, which it transfers to any other food in its presence.
In the case of an untrimmed steak that is grilled over live coals, the fat layer and chunks immediately burn and fill the air with acrid smoke. The burning fat ruins the flavor of both the fat and the meat around it.
Moreover, scientific studies are beginning to show that grilling an untrimmed steak creates "free radicals", which may pose a cancer risk. Whether or not further studies prove or disprove the cancer link, the fact is that burned fat tastes bad and makes the steak meat taste bad.
Therefore, a steak that is to be grilled should be first trimmed of the surrounding layer of fat and any fat chunks inside the meat.
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