Mad Cow disease was found Tuesday in a cow in central California.
The infected cow was found at the Baker Commodities Inc. rendering plant in Hanford, Calif., during a routine test for the disease and did not enter the food chain, officials said.
Rendering plants are used to process sick animals into products such as soap and glue.
According to CNN, the sample of the cow was sent initially to UC Davis for testing but came back inconclusive.
A further test at USDA's labs showed the sample to be positive for the disease.
US officials said that there is no reason for worry as the animal carcass had been isolated.
"There is really no concern for alarm here with regards to this animal," said John Clifford, the US Agriculture Department's chief veterinary officer, reported Reuters.
"Both human health and animal health are protected with regards to this issue,"
Mad Cow diease or Bovine Spongiform Encephalopathy, is a neurological disorder that cause serious behavioural changes in cattle, including increased aggression.
Eating the meat could infect people with the Creutzfeldt-Jakob brain disease, which has killed hundreds of people in the past.
According to Bloomberg, this is the fourth case of the disease found in the US herd since it first appeared in December 2003 from a cow originating from Canada.
The Mad Cow outbreak in the United States caused massive declines in US beef exports, particularly to Japan, which still limits US beef.
It is estimated to have cost the beef industry three billion dollars in lost revenues.
The most recent outbreak was in March 2006.
Clifford was quick to say that US beef was safe and ready for export.
"It's critically important for the trust and continuing of the trade between those countries," said Clifford, according to Reuters, attempting to preempt new concerns about the safety of American beef.
The Wall Street Journal reported that cattle futures on the Chicago Mercantile Exchange fell by three cents or 2.6 percent - the lowest level since July 1.