Many countries began banning the importation of U.S. beef in December 2003 because one cow in Washington state had been diagnosed with the disease.

A Kansas beef producer, Creek Farms Premium Beef, which raises Black Angus, wanted to test each of the 300,000 cattle it slaughters each year to combat the import bans. But the Department of Agriculture used a federal law to prevent Creek Farms from buying or using a mad cow disease testing kit.

Creek Farms is a midsize beef producer. Larger beef producers had opposed the universal testing.

The Kansas beef producer lost the main part of the case in federal court and appealed.

Friday, the U.S. appeals court panel majority said federal law allows the restrictions, and the Agriculture Department's interpretation of the law was "reasonable." The department "can regulate the use of the rapid (mad cow disease) test kit by, inter alia, restricting the distribution and sale."

Cross Creek could ask the full U.S. Court of Appeals for the District of Columbia to rehear the case or ask the U.S. Supreme Court for review.