Creekstone Farms Premium Beef wants to look for the disease in every animal it processes. The Agriculture Department has said no. Creekstone says it intends to sue the department.
"Our customers, particularly our Asian customers, have requested it over and over again," chief executive John Stewart said in an interview Wednesday. "We feel strongly that if customers are asking for tested beef, we should be allowed to provide that."
Creekstone plans to hold a news conference Thursday in Washington to discuss the lawsuit.
The department and larger meat companies oppose comprehensive testing, saying it cannot assure food safety. Testing, they say, rarely detects the disease in younger animals, the source of most meat.
"There isn't any nation in the world that requires 100 percent testing," department spokesman Ed Loyd said Wednesday.
Larger companies worry that Japanese buyers would insist on costly testing and that a suspect result might scare consumers away from eating beef.
Japan was the most lucrative foreign market for American beef until the first U.S. case of mad cow disease prompted a ban in 2003. The ban cost Creekstone nearly one-third of its sales and led the company to slash production and lay off about 150 people, Stewart said.
When Japan reopened its market late last year, Creekstone resumed shipments. Japan has halted shipments again, after finding American veal cuts with backbone. These cuts are eaten in the U.S. but are banned in Japan.
Stewart said that when trade resumes with Japan, Creekstone is in a position to rehire the laid-off workers and then some.
Creekstone would need government certification for its plan to test each animal at its Arkansas City, Kan., plant. The department refused the license request in 2004.
The U.S. has been testing around 1 percent of the 35 million head of cattle slaughtered each year, although officials have been planning to scale back that level of testing.
While individual companies in Japan may want comprehensive testing, Japan's government is not asking for it.
Japan does have lingering questions about the shipment of prohibited veal, even after the U.S. sent a lengthy report to Tokyo explaining the mistake was an isolated incident. The report blamed the company, Brooklyn-based Atlantic Veal & Lamb, and a government inspector for misunderstanding new rules for selling beef to Japan.
Japan's agriculture minister, Shoichi Nakagawa, said Wednesday that further talks are needed.
"We do want to keep going back and forth with the U.S. over this issue," he said. "We want the U.S. side to squarely answer our questions."
The U.S. has had three cases of mad cow disease. The first appeared in December 2003 in a Washington state cow that had been imported from Canada. The second was confirmed last June in a Texas-born cow, and the third was confirmed last week in an Alabama cow.
Japan has had two dozen cases of BSE.
Mad cow disease is a brain-wasting ailment known medically as bovine spongiform encephalopathy, or BSE. In people, eating meat products contaminated with BSE is linked to more than 150 deaths worldwide, mostly in Britain, from a deadly human nerve disorder, variant Creutzfeldt-Jakob Disease.