Custom beef ranchers who used the now-shuttered Rancho Feeding Corp. for a slaughterhouse will not be allowed to sell any of the meat they processed at the Petaluma company's plant, the federal government told the ranchers on Wednesday.
That stymies for now the ranchers' efforts to convince the U.S. Department of Agriculture to exempt hundreds of thousands of dollars worth of their beef from the international recall of Rancho products.
The ranchers reacted angrily.
"We're not done with them yet. They're opening up a can of worms by doing this," said Bill Niman, a Bolinas cattleman who said he has at least of $300,000 of his high-end beef tied up in the recall.
The USDA's Food Safety and Inspection Service, or FSIS, also said that it would not pay the ranchers for the embargoed product.
"FSIS does not have authority to offer compensation," Daniel Engeljohn, assistant administrator for the FSIS Office of Field Operations, wrote to Niman on Wednesday.
"It's ridiculous and bogus," said Tara Smith, owner of Tara Firma Farms in Petaluma. She surrendered a far smaller amount of meat than Niman, she said, about 270 pounds of offal and ground beef, but was outraged by the decision.
The slaughterhouse closed down in February amid a recall of 8.7 million pounds of its beef and veal sold in the United States and Canada - all that it processed in 2013. The company is being investigated by the USDA, the agency's inspector general and the U.S. attorney General's Office.
The agencies have been tight-lipped about the suspected wrongdoing. The USDA has said, without elaboration, that Rancho Feeding circumvented inspection rules and "processed diseased and unsound animals."
One of Rancho's former owners, Babe Amaral, also has called for the ranchers' meat to be released. In a statement through his attorney, he said none of their cows or meat was "tainted, diseased or uninspected."
However, at an earlier meeting between Engeljohn and the affected ranchers, Engeljohn told them the "deception" by Rancho's operators had left regulators unable to conclude that any of the recalled meat was safe.
That view was restated with certainty in Wednesday's letter.
"Even though the investigation is ongoing, FSIS is confident that it cannot ensure that your product was not substituted or cross-contaminated with other product not receiving complete inspection," Engeljohn said in a letter also sent Wednesday to several other ranchers.
"Consequently, your product along with all other product handled by the establishment during the scope of the recall also is determined to be unfit and cannot bear the mark of inspection," he wrote.
The FSIS confirmed Wednesday that several agency food safety and policy experts made the decision.
Local politicians diverged in their reactions.
Rep. Jared Huffman, D-San Rafael, expressed sharp disapproval of the regulators' decision.
"I'm not regarding this as the end of it," said Huffman, whose district who includes the operations of Niman and many other affected ranchers. "I'm hoping Mr. Niman and the other beef producers won't either, because this is completely unacceptable."
He said that the USDA shouldn't have denied the ranchers' requests without first explaining clearly what went on at Rancho and allowing the producers the chance to make an informed case for why their beef remains safe for human consumption.
"It's not reasonable to say, 'We reject your argument' without giving even a scintilla of information about what happened," Huffman said.
Rep. Mike Thompson, D-St. Helena, said that "I feel terrible for the farmers," but the regulators are following a process designed to ensure food safety. As part of that process, Engeljohn even came out here to personally hear the ranchers' appeals, Thompson said.
"I am not going to get in the way of protecting public safety and consumer health," he said.
Still, he said, what happened wasn't the ranchers' fault, and he remains committed to helping them seek compensation from the slaughterhouse.
"I think Rancho is liable for any loss that these farmers incur," Thompson said.
Engeljohn met March 7 in an east Petaluma boardroom with ranchers and representatives of elected officials, including Huffman, Thompson and California Sen. Dianne Feinstein.
The ranchers argued fervently that their meat, processed on different days than the dairy cows at the center of the controversy, could not have been cross-contaminated.
"It's never in the same room on the same day. We're all Thursday people," said Smith.
But they left with scant hope.
Engeljohn "said he was happy to hear all the information so he could go back and present it," Smith said, "but he said there was deception, absolute deception, and because of that the chances of it being released are slim to none."
It's not known how many custom ranchers are affected. Smith said there were five or six, including herself and Niman, at the March 7 meeting.
Among producers, Niman has disclosed the largest amount of beef in his company's freezers, roughly 100,000 pounds. But several other ranchers also have stored frozen meat.
They include David Evans, the owner of Marin Sun Farms, who recently purchased the former Rancho facility. Evans last month told KQED radio that "we have a whole lot of meat that's in our freezer" and its destruction would be "a massive loss."
Leftcoast Grassfed of Pescadero in San Mateo County has 3,000 pounds of recalled beef in its freezers, said director Kathy Webster.
To kill the cattle and then dispose of it in a landfill is "a travesty," Webster said. "I stand 100 percent behind that meat."
Amaral's partner, Robert Singleton, called the FSIS decision "a crime."
"They're not doing their job," he said. "That meat is 100 percent wholesome."
Asked if Rancho would be liable for all the ranchers' recalled meat, he said, "That I don't know."
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