How does the federal government have the ability to regulate beef processing and sale that has occurred entirely within a state's boundaries?

That is not intrastate commerce.

Deregulation at the federal level would allow states to create their own food safety protocols and doing so would place the state legislature at odds with the local people and would generally lead to less draconian laws that hurt trade and can be manipulated by outside interests.

States should decide what regulations are required for a producer to sell meat by the lb to individuals.

A rancher cannot sell meat directly to consumers, but a restaurant and grocery store can. How rediculous is that?

https://www.govinfo.gov/content/pkg/USCODE-2014-title21/html/USCODE-2014-title21-chap12-subchapIII-sec661.htm

Cut the red tape Mr. President and cut the heart out of the foreign interests killing US beef.