Washington ? A small meatpacking company warned Friday it may sue the Agriculture Department to obtain permission to test every animal at its slaughterhouse for mad cow disease.

Agriculture officials have refused a license request from Creekstone Farms Premium Beef, which said Japanese customers would buy its products if the company tested every animal processed at its Arkansas City, Kan., plant for the brain-wasting disease, known as bovine spongiform encephalopathy.

Consumer advocates, some lawmakers and U.S. trading partners are pressuring the agency to expand its testing program. Japan, the biggest market for U.S. beef, is demanding the United States test all 35 million cattle that are slaughtered each year.

Creekstone chief executive John Stewart said Friday, “We will challenge USDA’s decision and are confident we will prevail.” His company already has built a state-of-the-art testing laboratory and has trained staff to perform the tests.

“The Japanese government, as well as Japanese consumers, are standing firm in that they want all beef imported from the United States to be tested for BSE,” Stewart said.

The Agriculture Department said 100 percent testing is unjustified, citing international experts, and that trade negotiations were extremely sensitive right now.

Bill Hawks, the department’s undersecretary for marketing and regulatory programs, said Friday that Creekstone’s testing proposal would have implied a consumer safety issue that wasn’t scientifically warranted.

“… There is no scientific justification for 100 percent testing because the disease does not appear in younger animals,” Hawks said.

Consumer groups were surprised by the department’s refusal.

“It seems to me they’re holding Creekstone captive to some notion that trading agreements are more important than trading,” said Carol Tucker Foreman of the Consumer Federation of America.

“The government’s telling them, ‘You can’t make the product people want to buy.”‘