Biosecurity New Zealand announced yesterday it was managing a possible case of the Infectious Bursal Disease Virus type 1 (IBDV 1) at the Mainland Poultry egg farm in Waikouaiti.
The virus poses no risk to human health or the health of other animals, and testing of all South Island layer and meat chicken farms has already started.
A second Mainland property, near the Waikouaiti facility, has also returned suspect results, which are being confirmed.
The disease is highly contagious and affects the immune system of young chickens.
Until overseas tests are able to confirm the presence of the virus, Biosecurity New Zealand will stop issuing certificates for the export of chicken products to four countries that require a guarantee New Zealand is free of the virus.
That includes Australia, the largest importer of New Zealand chicken meat.
Domestic egg and chicken supplies are not affected.
Mainland Poultry chief executive Michael Guthrie said the company was working closely with Biosecurity New Zealand and the Egg Producers Federation to manage the situation.
There would be no impact on the food safety, quality and supply levels of Mainland's egg products, Mr Guthrie said.
Operations at the Waikouaiti farm would continue as usual, and none of the birds showed any signs of illness.
Egg Producers Federation and Poultry Industry Association executive director Michael Brooks said the possibility the virus had been detected in New Zealand was a blow for the industry.
While the affected exports were a small part of the industry, it would still affect producers, Mr Brooks said.
''It's about 8% of the chicken meat industry and a few percent of the egg industry.
''But when you consider we produce 1.1billion eggs, that's still a fair number of eggs affected.''
Since the industry was made aware of the initial voluntary test results from the farm, it had accelerated its testing for the virus on egg and poultry farms.
So far, about 80 farms had been tested. All results were negative, Mr Brooks said.
Testing would be completed on Otago and Southland farms in the next few days.
''Mainland has exemplary biosecurity measures in place, and both Biosecurity New Zealand and Industry have confidence the virus will not spread from that facility.''
Biosecurity New Zealand response manager David Yard said preliminary test results indicated the virus was highly likely to be present at the property, but further testing was required.
No birds at the farm had disease symptoms and the property itself was under voluntary biosecurity controls as a precautionary measure, Mr Yard said.
Most other countries in the world had the virus and successfully managed it within the industry.
The virus was discovered in New Zealand in 1993 but an industry-led programme to eradicate it was successful.
If the presence of the virus was confirmed, Biosecurity New Zealand would investigate how it could have entered the country, exploring a range of possibilities, including imported veterinary medicines, travelling farm workers and other imported goods.
