Sunrise Farms sits just outside of the rural town of Harris in northwestern Iowa, surrounded by miles of farmland studded with grain silos and wind turbines. The property's buildings house 3.8 million egg-laying hens, just under a 10th of the state's "layer" population. Rather, it did claim 3.8 million hens.

Sunrise Farms, an affiliate of privately held Sonstegard Foods, has been that's highly contagious and rapidly lethal to poultry. The facility's entire flock has been condemned to death, and the property—as well as farms within 10 kilometers—has been quarantined indefinitely. (Tweet This) Local authorities sit camped out in cars at each of the farm's gravel entrances.

How it works

To date, more than 50 cases of avian flu have been reported across multiple states, with more than 6.5 million chickens and turkeys destroyed. This week, Wisconsin and Minnesota declared states of emergency to deal with the epidemic. The Sunrise case is especially alarming because the farm is believed to have adhered to strict biosecurity standards. Poultry producers face stiff protocols when their facilities become contaminated. An infected farm is immediately quarantined until further notice, cleaned from top to bottom, and tested repeatedly until all signs of the virus are extinct from the premises. Most importantly, in that weeks-long process, the entire facility is "depopulated," a necessary step to prevent the spread of the virus to other locations and to ensure that exposed poultry doesn't make its way into the food supply. Read MoreCNBC explains: Avian influenza, or bird flu

The expense is staggering for a producer. Some federal aid is available, but it doesn't cover the cost of lost product. And the disposal process itself is costly. "It could be hundreds of thousands of dollars. An operation like the Iowa facility [Sunrise Farms] that's really a big facility, could very easily run up to few million dollars," said Dr. John Clifford, chief veterinary officer at the USDA. At Sunrise, roughly a million hens have already succumbed to the flu, which can kill a bird in as little as 48 hours. The question state and federal authorities have been grappling with all week, though, is how to dispose of millions of hens after they've been "humanely euthanized." A Sonstegard spokesman said no final decisions have been made, but a course of action is expected "very soon."

'Conditions that need to be considered'

Minnesota declared a state of emergency on Thursday over a fast-spreading strain of avian flu. Barrett & Mackay | Getty Images

Experts say there is no single technique for carrying out the disposal of a contaminated facility. Each case is reviewed individually. According to a paper published by the Environmental Protection Agency in 2006, "it is important to realize that each AI [avian influenza] outbreak incident is unique and involves site specific conditions that need to be considered in making the best disposal decision for the situation at the site."

There are two ways poultry are killed: carbon dioxide or foam. Both work by suffocating the birds quickly. So far, water-based foam has been the more common option in recent outbreaks, most of which have hit smaller farms. Read MoreUS poultry exports plunge with avian flu scare The Iowa Department of Agriculture says CO2 will likely be used at Sunrise, since that's the more efficient method for a large, caged population. The method of euthanasia is up to the farm; disposal methods are subject to state approval.

A burial site also must be found where measures can be taken to prevent water contamination, which is a problem that can arise not from the virus but from decomposition. The virus doesn't survive long in its host once the bird has died. Clifford said the preference is to compost the carcasses in-house and spread the remains on the farm, a process commonly employed in turkey disposal. The virus is killed in the composting process, which can take weeks but has the upside of fertilizing the soil.