Cows graze in a pasture in the southern Alberta foothills near Dog Pound in this file photo taken on March 2, 2005.
Cows graze in a pasture in the southern Alberta foothills near Dog Pound in this file photo taken on March 2, 2005.

Canada confirmed its first case of bovine spongiform encephalopathy (BSE) disease since 2011 on Friday but said the discovery, which helped drive cattle prices higher, should not hit a beef export sector worth C$2 billion ($1.6 billion) a year.

The Canadian Food Inspection Agency (CFIA) said no part of the animal, a beef cow from Alberta, had reached the human food or animal feed systems.

BSE is a progressive, fatal neurological disease.

"The CFIA is seeking to confirm the age of the animal, its history and how it became infected. The investigation will focus in on the feed supplied to this animal during the first year of its life," the agency said.

Canadian exports were badly hit in 2003 after the first case of BSE was detected. Canada subsequently tightened its controls and many nations have since resumed the beef trade with Canada, despite the discovery of more cases since then.

Asked whether he was concerned about exports being harmed, Agriculture Minister Gerry Ritz told reporters in Calgary: "Not at this time, no."

He added though that markets in South Korea and Japan were generally very concerned about the potential risk from BSE.

A fresh discovery of BSE may not close borders to beef, given the tougher measures, but it could delay Canada's efforts to upgrade its international risk status from the World Organization for Animal Health (OIE).

Ritz said Canada's current OIE risk status meant it could report up to 12 outbreaks in a calendar year.

On the Chicago Mercantile Exchange, the news helped drive up live cattle contracts for delivery beginning this spring by as much as 2 percent.

The market rallied in part because of the prospect of less beef coming across the border, said Joe Ocrant, president of Oak Investment Group in Chicago.

But he said most of futures’ gains on Friday were tied to traders who had initially placed bearish bets in the market and then exited those positions by purchasing contracts in anticipation of packers paying more for market-ready or cash cattle this week.

BSE is believed to spread when cattle eat protein rendered from the brains and spines of infected cattle or sheep. Canada banned that practice in 1997.

The CFIA tightened feed rules in 2007 and said this should help eliminate the disease nationally within a decade, although the agency said it still expected to discover the occasional new case.

Dave Solverson, president of the Canadian Cattlemen's Association, said in previous outbreaks there had rarely been more than one infected animal on an individual farm.

"It's very unlikely there will be more cases found," he told the Canadian Broadcasting Corp.

($1=$1.25 Canadian)