Discovery of the nation's first case of mad cow disease in a Washington state dairy cow sent US cattle prices plunging by 20 per cent in one week and prompted more than two dozen nations to halt $3.2 billion in annual imports of US beef.

Japan, the No. 1 buyer, will send a team of food experts to the United States, probably in January, to gather information that may bolster US requests for resumption of trade.

Agriculture Secretary Ann Veneman defended the department's policy to test the highest-risk cattle, which includes older animals, sick and injured ones, and cattle showing signs of neurological disease that could signal made cow disease.

Veneman and USDA's chief veterinarian, Ron DeHaven, brushed aside suggestions to test all cattle, as Japan does. DeHaven told reporters it was premature to consider such an action in the eighth day of investigating the mad cow case.

"We had a single find of BSE (mad cow) in this country and we believe that what we're doing is appropriate action taken in an abundance of caution under the circumstances," Veneman said on NBC-TV's "Today Show."

Formally named bovine spongiform encephalopathy, mad cow disease is cause by misshaped proteins called prions. It is fatal and can be spread by eating contaminated meat.

During a news conference, DeHaven said it was "far too premature to draw any conclusions" about the source of feed that may have infected the Holstein in Washington state and the Black Angus cow that was Canada's first case of mad cow in May.

Published reports said investigators were looking at a rendering plant in Edmonton, Alberta.

Investigators have located nine other cows apparently shipped from Canada with the infected one, he said. They have "good leads" on the remaining 71 from the same lot in August 2001. They were sold in the breakup of a Canadian dairy herd.

In an abrupt change in policy, the Bush administration announced several new restrictions on Tuesday to protect the food supply, including banning sick or injured cattle from use in human food. The ban on "downer" cattle was previously opposed by the White House and the livestock industry.

A handful of Democratic lawmakers say more federal meat inspectors must be hired as part of mad cow security.

USDA declined to say if more inspectors were needed. "We will adjust our work to accomplish the new policies," said Daniel Englejohn of the Food Safety and Inspection Service.

Veneman used her power under an animal health law to immediately ban downer cattle from the food supply. The animals, believed to number about 200,000 out of a total annual slaughter of nearly 36 million, still can be used in making pet food and other products not intended for human consumption.