A cow the Agriculture Department (search) had suspected of carrying mad cow disease (search) was declared free of the illness after follow-up tests, officials said Tuesday. The announcement was a relief to the U.S. beef industry, which is still trying to recover from the nation's first case of the disease last December.

Initial screenings last week had raised the possibility of a new case of the disease in the United States. But a more definitive test at the National Veterinary Services Laboratories (search) in Ames, Iowa, came back negative, the officials said.

Cattle futures trading ended Tuesday at 87.25 cents per pound on the Chicago Mercantile Exchange, just slightly below the 87.32 cents per pound it was at the end of last Wednesday, the day before the latest mad cow scare. In between, it had dipped to nearly 84.2 cents per pound.

"We saw the market sell off and then stabilize," said Bill O'Grady, director of futures research for A.G. Edwards & Sons, Inc. in St. Louis. "The market had sort of expected that the odds were high this would end up being a false positive."

O'Grady and Gregg Doud, chief economist of the National Cattlemen's Beef Association, said beef prices also were affected by the heavy rains and snow in parts of Texas. Doud said it was hard to say how much the mad cow scare alone had influenced the markets.

"We're already back to where we were," said Doud.

After the initial screening, the Agriculture Department said it ran a "gold standard" test twice, on Monday and Tuesday. Officials did not say where the cow came from or why it was suspected of being diseased.

"Negative results from both ... tests make us confident that the animal in question is indeed negative," said John Clifford, deputy administrator of the department's Animal and Plant Health Inspection Service.

The initial screenings had produced what officials said were "inconclusive" results, but just the possibility of a second case had rattled cattle producers, meatpackers and hamburger chains.

Julie Quick, a USDA spokeswoman, said officials would provide no further information about the suspect cow since the test results came back negative.

It has been less than a year since the first case of mad cow disease, or bovine spongiform encephalopathy, was found in the United States. The disease attacks an animal's nervous system, and food contaminated with BSE can afflict people with variant Creutzfeldt-Jakob disease, a rare disease that is usually fatal.

A Canadian-born Holstein was found infected with BSE last December at a slaughterhouse near Moses Lake, Wash. More than 40 countries almost immediately cut off imports of U.S. beef and more than 700 additional cattle in Washington state, Oregon and Idaho were killed as a precaution. Exports account for about $3.8 billion of America's $40 billion a year beef industry.

The first case led authorities to broaden the number of animals screened for the disease and to further restrict what animal parts can be used in cattle feed. Some of those parts, such as the brain, spinal cord and small intestines, have the highest risk of contamination.

Preliminary screening tests have been conducted on more than 121,000 animals since the Agriculture Department initiated a new testing regime in June focusing on high-risk animals: those that died on the farm, had trouble walking or showed signs of nerve damage.

Within weeks, officials said they might have found two more animals whose preliminary screening tests came back "inconclusive," the same terminology used last Thursday when officials announced the latest possible case. But those two cases turned out to be false alarms once the more definitive tests came back.

Starting in August, the department began requiring two preliminary screenings before it would announce the possibility of BSE in an animal.

As of September 2003, the department was testing more than 20,000 animals a year using the more definitive procedures in Iowa. It had planned to double that in 2004, before it decided to change to the rapid screening tests.

Consumer groups and other critics of the screening procedures say the program is still inadequate. They want the government to adopt a system that can track livestock nationwide from birth through the meat production chain.