UPDATE 1-Burger King changes policy on animals - rights groups

(Adds comments form Humane Society and PETA. Previous dateline NEW YORK.)

CHICAGO, March 28 (Reuters) - Animal rights groups lauded fast-food chain operator Burger King Holdings Inc. BKC.N on Wednesday for taking steps to use suppliers who do not confine their animals in crates or cages.

"With its new policy changes, Burger King is signaling to agribusiness that the most inhumane factory farming practices are on the way out," said Wayne Pacelle, president and chief executive of the Humane Society of the United States.

Burger King did not return several telephone calls seeking comment on the steps it is taking with suppliers, which were reported in the New York Times on Wednesday.

The newspaper and animal rights groups said Burger King will also favor suppliers of chickens that use gas, or "controlled-atmospheric stunning," rather than electric shocks to knock birds unconscious before slaughter.

The goal for the next few months, Burger King said in the Times, is for 2 percent of its eggs to be "cage free," and for 10 percent of its pork to come from farms that allow sows to move around inside pens, rather than being confined to crates.

The company said in the Times that those percentages would rise as more farmers shift to these methods and more competitively priced supplies become available.

"Burger King's new plan helps reduce some of the worst factory-farming and slaughterhouse abuses and will send a shock wave through the meat and egg industries," Bruce Friedrich, vice president for people for the Ethical Treatment of Animals, or PETA, said in a news release.