NEW YORK (CNN/Money) -
Albertson's Inc. is recalling ground beef in Washington, Oregon, and parts of Idaho, and has removed some beef products from its stores in those states, after the government reported a case of mad cow disease at a small farm in south-central Washington.
The nation's second-biggest supermarket chain said it took the precautionary measures after one of its Oregon-based suppliers of ground beef, Interstate Meats, notified Albertson's that some of its beef supplies had been recalled by the United States Department of Agriculture (USDA).
The USDA early Wednesday recalled about 10,000 pounds of U.S. beef after it reported what is apparently the first confirmed case of mad cow disease in the United States.
Albertson's, which operates 2,300 supermarkets across the country, said in a statement that the USDA "remains confident in the safety of [its] food supply" and that the risk to human health from the disease is extremely low.
It said nothing further about the total amount or the safety of the meat it is recalling from its stores, mainly one- and two-pound packages of ground beef. Officials at Albertson's were not immediately available for further comment.
Albertson's is apparently the first major food retailer to recall beef products this week. But it remains to be seen if other retailers or meatpackers will follow suit, and to what extent that could impact the nation's $27 billion beef industry.
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Rival supermarket chain Safeway said it has stopped selling all ground beef products in its stores in Oregon.
"We have removed the ground beef products that came from our regional supplier Interstate Meats," spokesman Brian Dowling told CNN/Money. "This is a precautionary move and does not affect our stores outside of Oregon."
The Pleasanton, Calif.-based company, with 1,700 supermarkets in 23 states including Oregon, currently has no plans to recall ground beef sold at its stores but is staying in touch with the USDA, Dowling added.
The report that one cow from a small farm in Mabton, Wash., about 35 miles southeast of Yakima, probably had bovine spongiform encephalopathy (BSE), or mad cow disease, spooked investors Wednesday.
Shares of hamburger chains like McDonald's (MCD: Research, Estimates) and Wendy's (WEN: Research, Estimates) tumbled, as did meatpackers and processors.
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 The first case of mad cow disease in the U.S. has been reported in Washington state. CNNfn's Chris Huntington reports on the impact on business.
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Among grocery stocks, Albertson's (ABS: Research, Estimates) stock fell almost 1 percent. Food-related stocks could take another hit when markets reopen Friday for a shortened session on Wall Street. Financial markets were closed Thursday for Christmas.
Mad cow is a brain-wasting disease thought to be transmitted from animal feed containing bovine brains or spinal cord. The United States bans the use of those materials in feed.
An outbreak of mad cow disease in Europe more than a decade ago, when few protections were in place, has resulted in 137 human deaths so far.
Agriculture Secretary Ann Veneman, in announcing the Washington state mad cow case Tuesday, insisted American beef remained safe. She has noted a lone case of BSE in Canada last spring did not dampen beef consumption in North America.
Albertson's asked customers to return the following products:
-- Pre-packaged (one-pound) 85 percent lean ground beef with a sell-by-date of Dec. 25, 2003
-- Pre-packaged (two-pound) 85 percent lean ground beef with a sell-by-date of Dec. 25, 2003
-- Pre-packaged (one-pound) 85 percent lean ground beef patties with a sell-by-date of Dec. 25, 2003
-- Ground beef bought from its Butcher Block Service Case (91 percent lean) between Dec. 16 and Dec. 23, 2003
Albertson's said it would give customers a full refund on any ground beef product bought at its stores in the three states.
The meat recall by Albertson's comes amid a bitter labor dispute between the Boise, Idaho-based chain, two rival chains and 70,000 union workers in the lucrative California market.
The other chains affected by the strike, now in its 11th week, are Kroger Co. (KR: Research, Estimates), the No. 1 supermarket chain, and Safeway (SWY: Research, Estimates).
-- from staff and wire reports
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