The H7N3 flu was detected in two municipalities in the state of Jalisco, Mexico's largest chicken farming region, and authorities have been working quickly to contain the outbreak, a statement from the ministry said.

"There is no risk of infection (in humans) as a result of consuming poultry," said Jose Munoz from the Jalisco state government.

It was not clear how many of the 870,000 birds - just a small fraction of the national flock - had contracted the flu and how many had been culled by farmers to contain its spread, an agriculture ministry official said.

Mexican health inspectors had examined nearly 150 poultry farms in Jalisco by Friday and detected the virus in 10.

"The virus has never been out of control. It is localized in two places in Jalisco and up until now there is no evidence that it is anywhere else," the official said, asking not be named.

As a cautionary measure, authorities declared a national animal health emergency on Monday to help prevent the disease's spread to other parts of Mexico or farther. The ministry has ordered vaccinations from Asia and is also developing their own drugs domestically to combat the flu.

The western state of Jalisco produces around 11 percent of the country's poultry meat and 50 percent of its eggs, according to the U.S. Department of Agriculture (USDA).

Mexico produces around 3 million metric tonnes (3.3 million tons) of poultry each year but consumes most of that locally, said Sergio Chavez from the national union of poultry farmers.

The country also imports some chicken parts from the United States. The USDA forecasts 2012 imports at around 630,000 metric tonnes.

Health officials are on high alert for new viruses in Mexico since the 2009 outbreak of H1N1 virus, known as 'swine flu' that shut down the capital city for several days when it was detected in humans.

(Reporting by Gabriel Stargardter; Editing by Bernard Orr)

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