The U.S. Department of Agriculture, which buys beef for the school lunch program and inspects meat facilities, suspended operations at Central Valley Meat Co. in Hanford, Calif.
The facility slaughters hundreds of cows a day after the cows lose their value as milk producers.
The USDA says it launched an investigation after receiving hours of videotape from animal welfare group called Compassion Over Killing.
The group says an undercover investigator was employed by the slaughterhouse and shot the video during two weeks in July.
Central Valley Meat Co. says in a statement that it would have no immediate comment on the video because it has not seen the footage.
The Associated Press contributed to this report.