The Agriculture Department (search) has rebuffed a meatpacker's plan to test every animal at its Kansas slaughterhouse for mad cow disease (search).

Creekstone Farms Premium Beef (search), a small Kentucky-based meatpacking company, had created a firestorm in the cattle industry by seeking government certification for its plan to test each animal at its Arkansas City, Kan., plant.

The USDA is under pressure from some lawmakers and consumer advocates to expand its testing program. Japan, the biggest market for U.S. beef, is demanding that the United States test all 35 million cattle that are slaughtered each year.

But the agency refused the license request from Creekstone Farms.

"We are looking at what the consensus of international experts is when it comes to testing, and that consensus is that 100 percent testing is not justified," Agriculture Department spokeswoman Alisa Harrison said late Thursday. "That's why we feel at this time we cannot grant Creekstone's requested timeline for a decision."

Creekstone said its customers in Japan promised to buy Creekstone beef again if the company tested for the brain-wasting disease in every animal processed at the plant and could show USDA certification of that.

On Friday, Creekstone Farms called the Agriculture Department's decision a mistake, but said the company would survive.

"We are pretty depressed about that decision right now. We put a lot of effort and a lot of money into it," said Creekstone spokesman Brad Caudill. "We are going to regroup today."

Scientists have said that testing each animal is excessive. Plus, the American beef industry is worried about the cost of such testing. They fear that any false-positive tests could potentially scare consumers and cause beef sales to slide, and that Creekstone's plan would set a precedent for trade negotiations.

"We want a level playing field for all companies based on science," said Gary Webber, director of regulatory affairs for the National Cattlemen's Beef Association (search).