Schools in Washington state and California took beef off the menu on Monday after a Californian meatpacker recalled the largest amount of beef in US history.
But agriculture officials played down the risk to humans after Hallmark/Westland Meat Packing agreed to take back more than 143 million pounds of raw and frozen meet when it was found in violation of inspection rules.
The company, based in Chino, California, voluntarily recalled the beef after the federal Food Safety Inspection Service (FSIS) determined the cattle "did not receive complete and proper inspection."
The company did not "consistently contact the FSIS public health veterinarian in situations in which cattle became non-ambulatory" before being slaughtered, the USDA statement said Sunday.
Federal rules usually ban the slaughter of "downer cattle" -- those unable to walk -- as a safeguard against mad cow disease or bovine spongiform encephalopathy (BSE).
US Secretary of Agriculture Ed Schafer said Hallmark/Westland had been suspended by the FSIS, and that the federal government had suspended food and nutrition contracts with the company.
"I am dismayed by the inhumane handling of cattle that resulted in the violation of food safety regulations" by the company, Schafer said in a statement.
"It is extremely unlikely that these animals were at risk for BSE because of the multiple safeguards; however this action is necessary because plant procedures violated USDA regulations," he added.
The department did not say where those food products had been sold, but schools in Washington state and California removed beef from their lunch menus as a precaution, local officials said.
America's meat packing industry has already been plagued by outbreaks of E. coli bacteria and other problems.
In September, Topps Meats Co. of New Jersey recalled 21.7 million pounds of frozen hamburger patties after people in New York and Florida fell ill because of E. coli poisoning.
The New Jersey company later filed for bankruptcy because the recall involved a full year's worth of production.
The largest previous recall involved 35 million pounds of ready-to-eat meats in 1999.
James Reagan, Chairman of the Beef Industry Food Safety Council, backed Sunday's recall, describing it as "a precautionary measure," but sought to reassure consumers that the US beef supply is safe.
"We have multiple interlocking safeguards in place in every beef processing plant in America so that if one is bypassed, the other systems continue to ensure the product we serve our families remains safe," Reagan said.
But William Marler, a food safety attorney from Seattle, Washington, called for congressional hearings on the safety of the US beef supply, accusing the Department of Agriculture of failing to enforce its own ban against use of downer cattle in the nation's school lunch program.
"In light of the Hallmark/Westland Meat Packing Company, which was caught on film processing 'downer' cattle, in violation of US law, we now know that USDA ban was a lie," Marler said.