The 20-pound boxes of ground beef from One Great Burger of Elizabeth, N.J., were stopped short of being fed to thousands of inmates in California and Oregon, company spokesman Frank Tobin said.
The meat had earlier been flagged by US Department of Agriculture (USDA) safety inspectors, but was shipped out regardless.
"The problem was discovered ... during an investigation into customer complaints of discoloration and off-odors in the products," the USDA said.
"The review uncovered evidence to show that the establishment repackaged and recoded returned products and sent them out for further distribution to institutional customers."
Some 226,400 pounds of meat were affected by the recall. No one has been sickened yet by the beef, the USDA said.
One Great Burger Beef Recall
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