The discovery of mad cow disease in a Holstein dairy cow in Mabton, Washington, has halted American beef exports worth an annual $3.2 billion and slashed cattle prices. However, restaurant and grocery chains say US consumer demand for beef has not wavered in the 10 days since the disease was found.

As part of the federal investigation into the nation's first case of the brain-wasting disease, the USDA said a third herd in Washington state has been quarantined.

The USDA, which banned sick or injured cattle from human food earlier this week, also said on Friday it might pay farmers to turn in such animals, known as "downers," so they can be tested for mad cow disease.

Downer cattle that are unable to walk are thought to have a higher possibility of being BSE-infected. Out of nearly 36 million slaughtered yearly, some 200,000 cattle are downers.

"Providing some financial incentive (to farmers) ... is one of many" measures under discussion, USDA chief veterinarian Ron DeHaven said. "Right now, all options are on the table."

Because downer cattle can no longer be taken to slaughter plants more mad cow testing must be done at rendering plants and on farms, DeHaven told reporters. A meeting will be held on Monday with rendering firms, farm groups and veterinary groups to discuss how to collect those samples for the USDA, he said.

Until this week, the USDA focused its tests for bovine spongiform encephalopathy (BSE) on cattle intended for human food, because humans can contract a form of the disease by eating infected meat.

Such a payment is crucial for farmers to turn over downers, instead of destroying and burning them on the farm, said Leon Thacker, an animal disease expert with Purdue University.

"In most instances the value of the cow to the rendering plant is not as much as it costs them to pick it up," Thacker said. He estimated farmers should be paid at least $200 for bringing a downer cow in for mad cow testing.

Rendering plants process animal remains at high temperatures to make bone meal, industrial products, livestock feed and ingredients for cosmetics.

USDA trade experts will fly on Monday to Mexico, the second biggest buyer of U.S. beef, to discuss resuming shipments.

USDA Undersecretary J.B. Penn told Reuters that trade should return to normal "sooner rather than later."

"Given the very positive steps that we have taken to both address any food safety concerns and address animal health concerns, we're hoping for a return to normalcy with all of our trading partners just as quickly as we possibly can," he said.

The USDA and industry urged other nations to lift their ban, saying the infected cow was believed born in Canada.

To help restore confidence among foreign and domestic consumers, the USDA has been working to track down all 81 animals believed to have been imported from Canada in September 2001.

Three herds in Washington state are now quarantined because they include herdmates of the infected cow, thought to have been born in Canada in 1997, the USDA said. DNA tests to conclusively prove whether the infected cow came from an Alberta herd are due early next week.

"We now have 11 of them accounted for," DeHaven said. "The whereabouts of the remaining 70 animals have yet to be confirmed."

Of the 11 cows, nine are in two herds quarantined last week. Another was found in a dairy herd in Mattawa, Washington, and was quarantined two days ago. The 11th animal is the infected cow, which was slaughtered on Dec. 9.

Some animals in the quarantined herds will be destroyed so their brains can be tested for mad cow disease, DeHaven said.

Another key part of the investigation was tracing the feed given to the infected cow and her herd in Alberta, he said.

Alberta is where Canada detected its first native case of mad cow disease last May. The source of infection of that Black Angus cow has never been determined.

The USDA also said it would not decide on reopening the U.S. border to imports of Canadian cattle until the U.S. mad cow investigation has been completed. Canadian farmers had hoped to resume their shipments early in 2004.

On Friday, US live cattle futures rose for the first time since the U.S. mad cow case was discovered. The contract for January delivery closed 0.525 cents higher at 74.300 cents per pound at the Chicago Mercantile Exchange, reversing the trend in which some contracts lost 20 percent of their value.