UPDATE 1-Wendy's seeking more meat from humane suppliers

(Adds animal rights group statement)

LOS ANGELES, July 12 (Reuters) - Wendy's International Inc. (WEN.N: Quote, Profile, Research), the world's third-largest hamburger chain, said on Thursday it would give preferential treatment to pork and chicken suppliers who improve animal welfare standards.

In a statement, Wendy's said 10 percent of its pork products come from hogs raised outside of gestation stalls. It is hoping to raise that figure to 20 percent by the end of 2008 and increase it over time.

Pork producers have been under growing pressure to eliminate the small stalls used to house pregnant sows in favor of keeping them in communal pens where they have more room to move around.

Wendy's also said it would give purchasing preference to chicken suppliers who explore and test so-called "controlled atmosphere stunning" (CAS) systems. Under the CAS method, chickens receive a mixture of gas and oxygen to render them unconscious before slaughtering.

Animal rights groups such as People for the Ethical Treatment of Animals have encouraged restaurant chains to switch to CAS, a method that is already used in Europe.

Earlier this year, animal rights groups lauded burger chain Burger King Holdings Inc (BKC.N: Quote, Profile, Research) for taking steps to use suppliers who do not confine their animals to crates or cages.

In a statement issued late on Thursday, animal rights group The Humane Society of the United States said it "recognized Wendy's for taking these steps to improve farm animal welfare," but the group called on the company to phase in the use of cage-free eggs.

The HSUS said Burger King had already begun using eggs from hens housed in facilities that allow them to spread their wings, walk and lay their eggs in nests.