Several animal bones were found in a pig pen at the farm, south of Wollongong, in breach of pig raising regulations which ban any animal parts being fed to them.

The owner was fined $550 after the bones were found during a site visit by NSW Department of Primary Industries (DPI) regulatory officers.

A DPI spokesman would not reveal the name or location of the fined piggery "for confidentiality reasons", but it is understood to be a small operation with about 12 animals.

The DPI's director of biosecurity compliance Dr Andrew Sanger said swill feeding was illegal for all pigs and this was a serious breach.

"Swill feeding is feeding meat, meat products or anything that has been in contact with meat to pigs - and it is illegal because it risks spreading serious animal diseases," he said.

He said the bones were disposed of and the pigs detained to ensure they posed no disease risk. They have since been released.

Dr Sanger said the danger of swill feeding could not be overstated.

"Swill feeding has the potential to cause exotic disease outbreaks such as foot and mouth disease," he said.

"Diseases associated with swill feeding animals have the potential to cause massive disaster for our livestock industries through loss of export markets, lost production and large-scale animal health and welfare issues."

Dr Sanger said authorities were investigating a separate swill feeding breach with a view to prosecution.