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Feb 20, 2014 06:27 PM

Marin Sun Farm Buying Rancho Slaughterhouse in Petaluma

If you've been following the recall of 8.7 million pounds of beef and the shutdown of operations of Rancho slaughterhouse in Petaluma during the investigation, perhaps the biggest food story to hit our part of the world, this afternoon's news is that Marin Sun will buy Rancho.

In the absence of public statements from either USDA or the owners with real information, everyone I talked to at social gatherings over the weekend had their own theory on what was going down. Conspiracy rumors were rampant, and one interesting thought surfaced that the initiation of a second investigation by the USDA Office of the Inspector General suggested that some greater crime such as pay-offs had been uncovered. But purely speculation.

The shutdown couldn't have come at a worse time. Ranchers have been thinning their herds in anticipation of less feed and to control environmental damage during the drought and rely on local slaughter. Then to have their product subject to recall with the associated financial loss is an added whammy. Here's the timeline:

Most of all, we hoped that a new operator could be found for the plant. Three years ago, the last time it appeared that Rancho might close, Marin Sun attempted to raise $3 million to acquire the business.
Given that MSF recently expanded with a physical plant in San Francisco, few of us thought it would have the resources to be able to step up . . . shows how much we know.

The Santa Rosa Press Democrat says the sale is in escrow, according to MSF. In SFGate, MSF's David Evans says it should reopen in two months. Consumers of local pasture-raised meats have been given a reprieve. And you can go back to eating Hot Pockets.

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    So this is a SF area slaughterhouse, that processes, among other animals, local 'sustainably' raised animals, including Niman Ranch. It's not a massive Central Valley feedlot operation. The speculation in this blog is that the problem was with handling of retired dairy cows, who are more likely to diseased (including eye cancer).

    15 Replies
    1. re: paulj

      No, it's not a massive operation. It is located right in town, just south of the outlet shopping center and is considered a prime parcel for housing development.

      Rancho's main business is slaughtering dairy cows. Petaluma is the center of the local dairy business. Rancho buys the retired cows and sells the meat on its own account in interstate commerce. It has been an important adjunct to the dairy business.

      It also custom slaughters steers from small ranches. Here's a photo I took of Chef Mateo Granados a few months ago showing me a quarter of a Wagyu/Charolais/Angus grassfed steer raised in Petaluma. He told me that he has been buying one a month, has it slaughtered at Rancho and sawn into quarters for hanging, then he picks it up and ages it for 30+ days in his own facility. This beef is incredible and I hope I will be able to taste it again.

      In recent years, there's been a lot of handwringing about what the impact on the Bay Area food system would be if Rancho were to close. Actually, much more than that with symposia and panel discussions devoted to the prospect. It had a sales offer for real estate development that might resurface again. And the owners were getting up there in years. With the experience of the last few weeks, we've seen the nightmare scenario played out in real life.

      FYI, Bill Niman has divorced himself from the company he founded, Niman Ranch. His new business is called BN Ranch.

      Thanks for the link to the VV piece.

      1. re: Melanie Wong

        So the meat that was used in Hot Pockets probably came from the old cows. Finely ground it doesn't need to be tender.

        1. re: paulj

          Probably. If those cows came from around here, they'd be pastured on grass most of their lives, many certified organic, and certainly rBST free.

          1. re: Melanie Wong

            Personally I don't care whether meat from diseased cows is organic, grass-fed, hormone-free, or federally inspected.

            1. re: Robert Lauriston

              According to the Villagevoice article, one of the things that an inspector has to determine is whether the 'disease' is localized or has the potential of contaminating the whole carcass. Apparently eye cancer is common in old cows. If it hasn't spread to the lymph system, is it enough to just discard the eye (and/or head)?

              1. re: paulj

                Cancer is just cells growing too fast and/or in the wrong place -- it's not transmissible. Is it really unsafe to eat, or is the idea just yucky?

              2. re: Robert Lauriston

                Well, those inspections are intended to keep diseased cows from slaughter for becoming "meat" and entering the food supply.

                Not every "retired" dairy cow is diseased. Some are just old and have slowed down production. Their ground meat would be safe to eat and might be perfectly tasty.


                1. re: Melanie Wong

                  According to this, 'The recall notice from the USDA's Food Safety and Inspection Service indicates a "reasonable probability" that consumption could result in "serious, adverse health consequences or death."'


                  1. re: Scott M

                    Yes, this has been pegged as a Class 1 recall defined as you state.
                    However, my point was not all dairy cows are diseased and not all the beef in Hot Pockets came from diseased cows.

                    The USDA's position is that everything processed in Rancho's facility last year is adulterated even though the suspect dairy cows were segregated from the custom slaughter cattle. That's what Bill Niman, LeftCoast Grassfed and other local ranchers are questioning about this blanket recall. Here's today's piece on what Niman is up against.

                    And today's editorial in the Press Democrat condemned the USDA's lack of transparency saying,

                    "...We have no reason to doubt that something serious happened at the Petaluma plant. But the allegation of 'diseased' animals being processed is a sweeping charge that casts a cloud over many North Bay ranchers, many of whom have been quick to defend their pasture-fed animals as healthy. But as long as their beef is under recall without explanation, they remain unable to clear their names."

                    1. re: Melanie Wong

                      It seems fishy. I wonder which big ag player asked the USDA to lean on Rancho. It seems that regulatory agencies at this point exist to serve corporate owners, not the public.

                      1. re: Josh

                        This is pretty obviously the work of either the Illuminati or space aliens.

                        1. re: Robert Lauriston

                          That's not what I meant, but thanks for the feedback.

                          1. re: Robert Lauriston

                            Just out of curiosity, did anything in the Pt. Reyes Light's report about this strike you as odd? What did you think about the trouble with the oyster farming at Pt. Reyes?

                            1. re: Josh

                              I think all the articles about this suffer from a lack of facts due to the USDA refusing to comment while the investigation is ongoing.

        2. There's no need for speculation, the USDA issued a press release on Valentine's Day:

          "California Firm Recalls Unwholesome Meat Products Produced Without the Benefit of Full Inspection

          Class I Recall 013-2014
          Health Risk: High

          Rancho Feeding Corporation, a Petaluma, Calif. establishment, is recalling approximately 8,742,700 pounds, because it processed diseased and unsound animals and carried out these activities without the benefit or full benefit of federal inspection. Thus, the products are adulterated, because they are unsound, unwholesome or otherwise are unfit for human food and must be removed from commerce, the U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS) announced today."

          5 Replies
          1. re: Robert Lauriston

            That's the same language USDA stated on February 8 when the recall was announced. Representative Mike Thompson is criticizing the agency for lack of transparency. Food safety professionals are saying that the lack of detail is unusual in this case, thus, the speculation.

            The scope of the recall is a full year's worth of processing. USDA has full time inspectors at the slaughterhouse. Does this mean that the inspectors have not been doing their jobs for the whole of 2013? Have Rancho's procedures been out of compliance for that long? Dairy cattle purchased by Rancho to slaughter and sell the meat itself are processed on different days than the steers it custom slaughters and returns to the owners. Many local ranchers accompany their animals to Rancho and observe the entire process through butchering, and they say the inspector has been present and nothing was amiss. Was it not possible to segregate the dairy cattle lots from the others in the recall? There are a lot of questions about overreach.

            1. re: Melanie Wong

              It's an ongoing investigation. The few facts available are weird but those who know aren't talking.

              If I had to speculate, I'd say PETA set them up.

              1. re: Robert Lauriston

                PETA has certainly been mentioned. I had been wondering if the investigation would continue in light of the sale to a new operator. Yesterday's LA Times piece has been updated with a new url and says:

                "There are no reported illnesses linked to the company's meat, but the firm is being investigated for potential criminal wrongdoing by the USDA's inspector general.

                A spokesman for the USDA said the investigation is ongoing despite the sale of the company. Investigators are looking into reports that Rancho Feeding may have circumvented inspections."


                Mother Jones coverage today refers to Rancho as a "giant" slaughterhouse and SFGate's Inside Scoop calls it "massive". Rancho is NOT large. Giant slaughterhouses do not accept niche customers such as the local ranchers who could bring in one or two steer at a time to Rancho. That was one of the reasons Rancho had been so critical to the growth of the local meat industry.

                1. re: Melanie Wong

                  That's pretty shoddy reporting. In a few seconds anybody can look up Rancho Feeding Corp. on Google Maps and see what a modest operation it is.


                2. re: Robert Lauriston

                  USDA made this statement yesterday:
                  “inspectors were present at Rancho Feeds during normal operations as required by law. The ongoing investigation is associated with the company's intermittent circumvention of inspection requirements.”

                  Perhaps there is criminal wrongdoing.

            2. While the national media has been making fun with the Hot Pockets aspect of the recall, I've been reading what the local ranchers and suppliers affected by this have to say.

              Victorian Farmstead (supplies Stemple Creek Ranch beef):

              LeftCoast Grassfed/TomKat Ranch has posted two notices about the recall on its website, including this statement:
              "Therefore, we are strongly requesting that the USDA immediately provide additional information through all available channels about:

              1.the nature of this recall
              2.whether or not they believe our beef, and the beef of our fellow small producers, has been tainted in any way and how
              3.if there is any way that the USDA can instead issue a targeted recall without endangering public health, as some have already called for, and if so, to do so immediately
     the USDA is going to support those producers who’s economic stability—nay, livelihood—is being affected by this recall

              Yesterday's NY Times piece on the national shortage of meat and poultry inspectors tees up one aspect of this perfect storm:
              "The inspectors’ union official, Stan Painter, who is the president of the National Joint Council of Food Inspection Locals and a meat inspector in Crossville, Ala., said the lack of inspectors most likely played a role in the recall because workers were stretched thin and did not have the time to properly examine meat."
              One has to wonder who bears the financial cost if and when the government employees fail to perform their jobs.

              As do the SFGate articles on the drought's impact on the North Coast dairy industry and the impact on grass-fed cattle .

              6 Replies
              1. re: Melanie Wong

                Bill Niman and Nicolette Hahn-Niman talked to Point Reyes Light about what they're doing to fight the blanket recall.

                "For Ms. Hahn Niman the 'especially abhorrent' aspect of losing the beef would not be the harm to their finances or her husband’s reputation, but killing all the animals only to have the meat destroyed.

                'This whole approach [of a blanket recall] sends a bad message to the general public and to the ranchers,” she said. 'It tells them it doesn’t matter what care you took. It doesn’t make a difference.' "


                1. re: Melanie Wong

                  Belcampo built their own slaughterhouse so they could ensure that it met their standards.

                  1. re: Robert Lauriston

                    Yes, Belcampo's business plan uses vertical integration to capture profits from ranch to the retail counter in a drive to scale. It also has very deep pockets funding its business through the start up and expansion phase. Not every rancher can afford to do this nor wants to. And Belcampo needs business from other ranches to cover its overhead at this point.

                    Prather Ranch also has its own slaughterhouse, which someone once told me is built to pharmaceutical clean room standards for its collagen business.

                    In 2008/2009 time frame I attended a panel discussion about local meat at Cal that addressed the roadblock access to slaughter has been for growing the sustainable meat business. One of the presenters was a small rancher that was just about to open a new slaughterhouse in the Central Valley. She wanted better treatment for her own animals in the last hours of their lives and I believe that she was aiming for organic certification. At the same time, she emphasized that the slaughterhouse would take all comers in order to have enough throughput to be viable. My recollection is that the slaughterhouse closed down not too long afterwards not being able to turn a profit.

                    Today the market for local meat is larger and continues to grow. I say kudos to those who are trying to figure out new ways to serve this growing consumer demand.

                    1. re: Melanie Wong

                      One of the TV travel food shows (Bizarre foods, Dirty jobs?) showed traveling butcher shop. A truck and trailer that would come to the ranch, do the at least the initial steps on site. Though I think they still did the final portioning and freezing at some central facility.

                      1. re: paulj

                        I've read about the mobile slaughter unit in Washington state. IIRC, a group of ranchers got together to co-invest.

                        Sonoma County has one last mobile customer slaughter business. It can be used for meat served in restaurants, but not for retail trade.

                      2. re: Melanie Wong

                        Yeah, Prather's main business is pharmaceutical collagen. Somebody told me they get $100K per cow. Their beef business is kind of recycling the leftovers.

                2. The Napa Valley Register offered views from some Napa County rancher families and retailers:

                  "North Bay ranchers are having to weigh making long drives to slaughter facilities hours away in the Central Valley or Eureka. The Ahmanns may now sell their old cows and bulls at auction in Galt at a fraction of the Petaluma sales price, she said."

                  And a quote from MSF's David Evans, “ 'We’re not taking over Rancho,' Evans stressed in an interview. Marin Sun Farms, he said, 'will only focus on custom processing of high-value, healthy livestock for branded meat companies.' "


                  The San Francisco Business Times identifies tech veteran, Ali Partovi, as MSF's sole outside financial backer in the acquisition of Rancho's facility and notes that the plan is to diversify into processing for pig, sheep and goat.

                  "Whatever the outcome, Evans said that he wants to distance himself from Rancho Feeding and will not be hiring back any former managers or senior executives to run the facility when it reopens, where he’s seeking to fill up to 20 positions."


                  1 Reply
                  1. re: Melanie Wong

                    Another source had said that Rancho's business was 70% dairy cows and 30% custom slaughter for local pasture-raised beef. It had also started processing pigs a couple years as an additional revenue stream.

                    The LA Times today offers more about the suite of services MSF intends to offer from slaughterhouse to cut-and-wrap to marketing/sale.

                    "Now, if Marin Sun’s purchase goes as planned, not only will those ranchers keep their conveniently located slaughterhouse, but they’ll also have access to butchers who can craft individual cuts of meat from whole carcasses, marketers who can help sell and distribute the meat, and even a buyer for any meat they can’t sell to their own customers.

                    And it will all be done on a sustainable basis."


                  2. Here's a link to a 52-minute interview of David Evans of Marin Sun Farms on KQED-FM on Feb. 24. Sounds like a bright guy. He didn't have any additional inside info on the reasons for the Rancho shutdown and recall but he can't sell the meat processed through that plant for the recall period even though it was handled separately. Also, I think that he said that he raises his meat organically but that he could not get it certified organic because Rancho was not certified.

                    The interview can be heard online or downloaded as an mp3 file:


                    4 Replies
                    1. re: zippo

                      What would organic certification mean for a slaughterhouse?

                      1. re: Robert Lauriston

                        starting at about the 34:25 to about the 35:00 mark in the interview Evans talks about getting the slaughterhouse certified organic, which is his aim. I don't know what that specifically would mean.

                        1. re: zippo

                          I found the relevant CCOF form. Looks like they would have to use approved cleaning products and pesticides and either have separate equipment for organic meat or "purge" the equipment before processing organic meat.


                        2. re: Robert Lauriston

                          Here's what's required to become a certified organic meat processor,

                          It should be noted that a certified organic facility can process non-organic animals as long as they are segregated from organic production.

                          Perhaps more important than what it means for a slaughterhouse might be the difference it can make to a meat producer. In order for the meat from an animal that has been raised certified organic to be labeled that way for market, it has to be slaughtered in a certified organic facility.