A serious bacterial disease found in cattle has been discovered in New Zealand for the first time.

The Ministry for Primary Industries (MPI) is responding to the detection of the cattle disease mycoplasma bovis in a dairy herd in South Canterbury.

It does not infect humans and presents no food safety risk, so there is no concern about consuming milk and milk products, said the ministry's director of response, Geoff Gwyn.

"This bacterial disease can, however, have serious effects on cattle including udder infection (mastitis), abortion, pneumonia and arthritis.

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Waitaki MP Jacqui Dean said the disease was detected on a Glenavy farm and it was not only disappointing but also concerning for other farmers in the region who were "just getting back on their feet" after last week's floods.

The disease is commonly found in cattle globally, including in Australia, but it's the first detection of it in New Zealand.

"Right now we're working with the farmer to contain the disease to the affected farm and treat the animals showing symptoms. We are very appreciative of his support in this work," Gwyn said.

MPI has put legal restrictions in place to stop any movement of stock from the property while the scale of infection is determined and was very appreciative of the farmer's support.

MPI was advised of sick cattle at the property last Monday and mycoplasma bovis was confirmed by the Ministry's Animal Health Laboratory late on Saturday.

"Fourteen cows have tested positive for mycoplasma bovis and approximately 150 cows on the property have clinical signs that indicate they may be affected. MPI is now tracing movements of animals on and off the property to ascertain if other properties are at risk.

"Right now, we do not know when or how the disease entered New Zealand," Gwyn said.

Farmers were advised to contact their vet if stock showed unusual levels of mastitis or abortions, or presented with arthritis or pneumonia.

When contacted, Federated Farmers dairy industry group chairman Chris Lewis said he hoped the outbreak could be contained on the property and eradicated. From Federated Farmers' perspective, the number one priority was the animal and human welfare around the issue.

The second priority was working with the likes of MPI, vets, dairy companies and DairyNZ to take a team approach to find answers to the "lots of questions" around the outbreak, Mr Lewis said.

Mycoplasma bovis only affects cattle and has no effect on other animals.

The New Zealand dollar dipped sharply on news of the outbreak at 2pm - dropping 20 basis points - but recovered immediately as it became clear this was a not a serious disease outbreak such as Foot and Mouth.

The kiwi dollar has traditionally been very reactive to speculation about diseases like Foot and Mouth or BSE which would have a devastating impact on the country's agricultural economy.