HONG KONG (Dow Jones) - The U.S. Department of Agriculture said Wednesday an agreement has been reached with Japan to restart U.S. beef exports, pending planned inspections of meat-processing plants by Japanese officials, the Nikkei reported.

"We have reached an agreement and are working to finalize the language of the agreement now," Department of Agriculture spokesman Ed Lloyd was quoted as saying in the report by the Nikkei, which is Japan's leading business daily.

Lloyd reportedly added Japan is expected to lift its ban "expeditiously upon completion of the audits."

U.S. beef exports were suspended in January after Japanese officials found a veal shipment that contained spinal material, which Tokyo considers at risk for mad cow disease.

Under the conditions of the agreement, officials from two Japanese ministries will visit the U.S. to inspect whether the 35 meatpacking plants certified to ship beef to Japan are complying with regulations, according to the Nikkei report. Only those facilities meeting the satisfaction of Japanese inspectors will be authorized to export to Japan .

The first U.S. beef shipments are expected to arrive in Japan in the second half of July, at the earliest, the Nikkei reported.

(END) Dow Jones Newswires 06-21-06 0947ET Copyright (c) 2006 Dow Jones & Company, Inc.