The U.S. Department of Agriculture reported the country's fourth-ever case of bovine spongiform encephalopathy (BSE), but stressed the outbreak was contained and no meat has entered the food chain.

The infected dairy cow from central California was uncovered on Monday but "at no time presented a risk to the food supply or human health," officials insisted.

BSE cannot be transmitted through milk.

"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."

Samples from 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 labs in Britain and Canada.

The admission of even a limited outbreak is highly sensitive.

Previous cases of mad cow in the United States, Canada, Israel, Europe and Japan have caused disruptions to the global food trade worth billions of dollars.

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

Wary US beef producers were also keen to prevent a panic.

"The most important message is that US beef is safe," said Philip Seng, US Meat Export Federation.

According to the organization, beef exports are worth more than $353 million to the United States each month, with Mexico, Canada, South Korea and Japan among the main export markets.

The United States has an estimated 90.8 million head of cattle, forming a large chunk of the economy in states like Texas, Nebraska, Kansas and California.

Around 40,000 US cattle are tested by the Department of Agriculture each year.

On the Chicago Mercantile Exchange the price of cattle futures fell on rumors of the news.

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

More than 200 people around the world are suspected to have died, most of them in Britain, 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.

Authorities believe eating meat from infected animals can trigger the human variant of the fatal brain-wasting disease. (AFP)