My son was disqualified being in the service before he ever had a physical at MEPS. Is this policy?

You can reference AR40-501 (standards of medical fitness) and this is what MEPS would go by with Army applicants.

Check AR40-501 Chapter 2 (initial procurement standards) 2-30j

From standards of Medical fitness "History of anaphylaxis (995.0), including, but not limited to idiopathic and exercise-induced; anaphylaxis to venom, including stinging insects (989.5); foods or food additives (995.60–69); or to natural rubber latex (989.82), does not meet the standard."
There is likely a DOD, or accessions/ induction paper/memo that further details what is reviled by the recruit candidate is to be considered "History of anaphylaxis"
So start with specifically WHAT did your son tell the recruiter?
If he said "I have a peanut allergy" and left it at that,. the recruiter likely had to DQ based on the statement.
If your son said I have a mild reaction to some foods, that have never cause medical treatment ..then perhaps the recruiter did not understand that correctly IAW the AR 40-501 cite I provided, or there is additional guidance from DOD, recruiter command, ect on this issue.

You might ask the recruiter to cite what document they referenced to DQ your son based on his statement to them

SFC (Join to see) - My nephew was turned down by recruiters for a peanut allergy as well.

He has a peanut allergy, never went to MEPS but now he's basically blacklisted. The allergy is moderate not severe and has documentation to say that.

Any type of food allergy is a risk, a majority of MREs have a large content of peanut product in it. There's always joining the local Militia or not to sound gross but using his own antineoplastins to heal his allergy effects are the only two options. That treatment takes a year.

Ok. Well I don't know without asking the USAF guys at my MEPS what their policy is on peanut allergies. But here's what I can tell you. He filled out a prescreen and marked yes to allergies. He explained a peanut allergy and should've explained the what happens when he eats peanuts- rash/hives anaphylactic shock/ death. Then the recruiters send that questionnaire to the MEPS with documents if any were provided and then the MEPS docs make a call based on the info provided- it's not uncommon for a no answer. Generally speaking the Service Liason can launch a waiver to their branches doctors for another review when the MEPS says no. In this case yes they can DQ someone before ever setting foot in the MEPS.
Common food allergies such as peanuts are tough ones to get passed the MEPS. Think about what you get in MREs- it's hard not to find s peanut product somewhere.

The USAF CMO can authorize your son to take a physical.

Thank you for getting back to me. My son said they listed it as a severe allergy even though he's ingested peanut products before and only needs Benadryl never an epipen. His allergy is only moderate so the other branches aren't even pursuing it once they read that.

Precisely. Especially considering they now have waivers even for certain felony cases.