Japan stopped imports of beef from the U.S. after inspectors found banned cattle parts in a shipment, disrupting trade that resumed last month following a two-year halt because of mad-cow disease.

Three of 41 boxes of beef from Atlantic Veal & Lamb Inc. were found to contain spinal cord, the Agriculture Ministry said today in a statement on its Web site. The shipment will be sent back or incinerated, the ministry said.

``We will stop importing beef from the U.S.,'' Japanese Prime Minister Junichiro Koizumi told reporters in Tokyo. ``It's disappointing as we just started.'' Koizumi said he ordered Agriculture Minister Shoichi Nakagawa and Health Minister Jiro Kawasaki to take ``appropriate measures.''

The move sent cattle prices in Chicago to the lowest since November and dealt a setback for U.S. beef processors such as Tyson Foods Inc., which had losses in the business after mad-cow disease was found in the U.S. in December 2003. More than 60 nations banned U.S. beef, threatening $3.8 billion in annual exports, half of which had gone to Japan in 2003.

``We're hopeful this unfortunate matter can be quickly resolved so we can continue rebuilding our export business in Japan,'' said Tyson spokesman Gary Mickelson. ``Our shipments to Japan have been steady since the market reopened. However, as expected, volumes have been limited because of Japan's import restrictions.''

Investigation Promised

U.S. Agriculture Secretary Mike Johanns said the U.S. takes the matter ``very seriously'' and promised a thorough investigation. Japan had resumed imports Dec. 12 after concluding the risk of mad-cow disease in U.S. beef was ``very small,'' providing certain conditions were met.

``Our agreement with Japan is to export beef with no vertebral column, and we have failed to meet the terms of that agreement,'' Johanns said in a statement.

``The product involved in Japan's decision was not supplied by Tyson Foods,'' Mickelson said ``We have procedures and protocol in place at our plants to ensure Japan's beef import restrictions are properly followed.''

American Meat Institute President J. Patrick Boyle said ``it is our understanding'' that the meat in question was veal from calves under six months of age and that mad-cow disease ``has never been detected in an animal this young.''

Global Standards

``This incident points to the need for uniform, global export standards to prevent the sort of trade disruptions that this error has caused,'' Boyle said in a statement. The AMI represents large U.S. meatpackers including Tyson Foods.

``I don't think we're back at square one,'' U.S. Trade Representative Rob Portman told reporters in Washington. ``I don't view it as a ban, but as a temporary setback.''

A woman who answered the phone at Atlantic Veal & Lamb's office in Brooklyn, New York, said the company had no immediate comment.

Cattle futures for April delivery fell 0.525 cent, or 0.6 percent, to 94.125 cents a pound on the Chicago Mercantile Exchange, the lowest closing price since Nov. 22. Before today, prices for the most-active contract had risen 7.6 percent in the past year.

Tyson Shares Fall

Shares of Springdale, Arkansas-based Tyson, the world's largest beef processor, fell 25 cents, or 1.5 percent, to $16.24 at 2:42 p.m. in New York Stock Exchange composite trading. Before today, the stock had dropped 7.4 percent in the past year.

Japan had imposed limits on U.S. beef imports, including that the meat come from cattle no older than 20 months and that spinal cords, brains and other parts of cattle blamed for spreading the human variant of mad-cow disease are removed.

Mad-cow disease is a brain-wasting livestock illness that scientists say is spread in cattle by tainted animal feed. Eating contaminated meat from infected animals can cause a fatal human variant that has been blamed for the deaths of 151 people in the U.K., where it was first reported in the 1980's.

Japan's decision last month to end its ban had cleared the way for meatpackers including Tyson and Cargill Inc. to reclaim a share of a $1.7 billion market. About 400 metric tons of U.S. beef were shipped to Japan in the week ended Jan. 12, the USDA said today. South Korea lifted its ban on U.S. beef this month.

Japan's agricultural minister told Koizumi ``it's extremely important to secure food safety, and Japan will request the U.S. to respond,'' Koizumi told reporters today.

Surprise Inspections

The U.S. will dispatch a team of inspectors to Japan to make sure beef shipments are in compliance with the export agreement, Johanns said. Additional USDA inspectors will be sent to every plant approved to export beef, and Johanns said he ordered surprise inspections at slaughterhouses.

Johanns promised to take ``appropriate action'' against the two USDA inspectors who approved the meat shipments found to contain the prohibited material.

U.S. beef exports plunged to 434 million pounds in 2004 from a record 2.5 billion pounds in 2003, after mad-cow disease was found in the U.S. Shipments rose to 644 million pounds in 2005 as some countries lifted import bans. The USDA on Jan. 12 estimated exports this year at 975 million pounds.

While U.S. beef was barred from Japan, Australian producers stepped in, grabbing 89 percent of the imported beef market.

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