Eight years ago, North Bay ranchers got their first scare that the region's only slaughterhouse was preparing to close its doors.
In 2006, the owners of Rancho Feeding Corp. announced plans to sell their Petaluma processing plant to make way for a housing subdivision. A historic housing market crash eventually scuttled those plans, but not before local farm leaders discovered how hard it would be to replace the processing plant.
Now, Rancho faces a two-pronged federal investigation and has recalled 8.7 million pounds of beef — a whole year's worth of production. The company voluntarily ceased operations last week and began compiling a lengthy list of food suppliers that had received its meat.
Both the plant's owners and the local cattle industry — including niche, grass-fed beef ranchers — face an uphill struggle to reopen the plant and avoid a major shakeup to their businesses.
The outlook isn't promising. Those who watch the meat industry say small plant owners have been hard-pressed to survive such massive recalls.
"In our experience, a large percentage of these very small slaughter plants end up going out of business because they can't survive a big shutdown for an extended period of time or (lack) the money to bring them into compliance," said Dena Jones, the farm animal program manager with the Animal Welfare Institute in Washington, D.C.
John Munsell, a former meat plant owner and a consultant in Miles City, Mont., said he shares that view. He maintained that Rancho's owners already face major costs to collect any recalled meat still held by wholesalers and retailers, then send the products to landfills and reimburse the purchasers.
Munsell, founder of the advocacy group Foundation for Accountability in Regulatory Enforcement, said Rancho's predicament looks all the more serious because the U.S. Department of Agriculture has directed its Office of the Inspector General to investigate the Petaluma processor. That office typically doesn't get involved in meat recalls, he and others said.
"That's a whole different ballgame," Munsell said.
The USDA investigation came to light Jan. 10, when federal agents and Petaluma police converged on the Petaluma slaughterhouse. Three days later, the federal agency announced that Rancho was recalling 41,683 pounds of meat — all processed on Jan. 8 — because it allegedly had not received a full federal inspection.
The recall expanded dramatically Feb. 8, when the USDA announced that Rancho was attempting to retrieve all meat processed at the plant in 2013.
The agency's news release asserted that Rancho "processed diseased and unsound animals" without a full inspection. The meat products, the USDA said, are "unsound, unwholesome or otherwise are unfit for human food" and must be removed from commerce.
Last week, the agency revealed its Office of the Inspector General was investigating Rancho. The USDA's Food Safety and Inspection Service continues its own separate probe.
By Saturday afternoon, the USDA had expanded the recall list to 74 sites in California and 18 in Alabama, Mississippi, Oregon, Washington and Florida. They include small and large retailers, Latino butcher shops, grass-fed beef suppliers, churches and nonprofit agencies.
Both federal officials and Rancho's owners have been tight-lipped about what went on during the past year at the plant on Petaluma Boulevard North. A key question is how the meat left the plant without a full inspection, even though a federal inspector is supposed to be present whenever animals are slaughtered.