By Agencies

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The first new case of mad cow disease in the US since 2006 has been discovered in a dairy cow in California, as the world's top beef exporter scrambled to reassure consumers around the world.

No meat has entered the food chain and the cow "at no time presented a risk to the food supply or human health," the Department of Agriculture said on Tuesday, pointing out that the disease, bovine spongiform encephalopathy (BSE), cannot be transmitted through milk.

Despite the reassurances, the case set alarm bells ringing as previous mad cow discoveries in the US, Canada, Israel, Europe and Japan have caused disruptions to the global food trade worth billions of dollars.

A stream of sanctions and restrictions had to be introduced in some cases, and entire herds of cattle had to be slaughtered, destroying the livelihoods of many farmers.

According to the US Meat Export Federation, beef brings more than $353m into the US, with Mexico, Canada, South Korea and Japan among the main export markets.

Economic effects

The US has an estimated 91 million head of cattle, forming a large chunk of the economy in states like Texas, Nebraska, Kansas and California.

About 40,000 US cattle are tested by authorities each year.

Samples from the infected animal were sent to a laboratory in Ames, Iowa, where they proved positive for a rare form of the disease. The results are now being shared with laboratories in Britain and Canada.

"The US Department of Agriculture's Animal (USDA) and Plant Health Inspection Service has confirmed the nation's fourth case of bovine spongiform encephalopathy in a dairy cow from central California," a government statement said.

"USDA remains confident in the health of the national herd and the safety of beef and dairy products.

"As the epidemiological investigation progresses, USDA will continue to communicate findings in a timely and transparent manner."

On the Chicago Mercantile Exchange the price of cattle futures fell following rumours of the news.

The biggest fear for farmers will now be for sanctions on US beef, a possibility the Department of Agriculture tacitly addressed, and denied.

"This detection should not affect US trade," it said.

International sales halted

Two major South Korean retailers have halted their sales of US beef, with ministry officials saying that an outright import ban was unlikely, but that a "suspension" of imports may be considered if necessary.

Lotte Mart, a unit of Lotte Shopping, said it had suspended sales due to what it said was "customer concerns", as did Home Plus, a unit of Britain's Tesco.

"We need to find out what exactly happened in the US ... We will make a decision soon over necessary measures," a spokesman at the Korean agriculture ministry said.

"It won't be an import ban, but possibly a quarantine suspension."

South Korea imported 107,000 tonnes of US beef last year, or 37 per cent of total imports, according to agriculture ministry data.

Seoul banned imports of US beef in 2003 after an outbreak of mad cow disease, but eased the ban later by allowing imports of boneless beef from cattle younger than 30 months.

More than 190,000 cases of mad cow disease have been detected in the EU since it was first diagnosed in Britain in 1986, the disease has led to the extermination of millions of cows.

More than 200 people around the world are suspected to have died, most of them in the UK, from the human variant of the disease, which was first described in 1996.

Scientists believe the disease was caused by using infected parts of cattle to make feed for other cattle.