What is Diatomaceous Earth?
Diatomaceous Earth, also known as DE, is actually a soft rock; the fossils of ancient lake algae, known as diatoms. It can feel mildly abrasive and at the microscopic level it is very abrasive. It works at controlling small pests, such as slugs, mites, and fleas, by being abrasive and cutting them. Diatomaceous earth is considered natural and can be used in organic farming. It may also be sold as Red Lake Earth.Using Diatomaceous Earth With Chickens
There are two possible ways of using DE with chickens (and other birds). One is internal, the other being external. Some people add it to the feed in their birds, with the idea being that it can control internal parasites. Other people use it as a dust bath, or sprinkle it in the nesting area; the idea being that the diatomaceous earth will control external pests.
When mixed with feed, no more than 2% of the entire feed should be DE. As chickens are likely to ingest what ever is in their environment, even if used only externally the diatomaceous earth should always be labeled as "food grade".
A rather lengthy study was done on laying breeds of chickens, you can read it here, but the results basically showed that hens that had diatomaceous earth added to their feed did not show any difference in resistance to internal parasites. Therefore using it as a feed supplement to control parasites proved to be a waste.
However, the study did show a reduction in skin mites when the DE was used as a dust bath, or when applied and rubbed onto the birds themselves. When sprinkled around the coop it does help control odors and moisture to some extent.
It should be noted that studies on mice have indicated that long term exposure to breathing in DE can cause some lung cancers, and as such using DE in the nesting area on a regular basis may not be advised. As such use in the coops should only be when certain insects (mites or other crawling insects) are an actual problem.