I have 2-week old chicks and am currently using sawdust and they act like "kids in the candy store" and are having a wonderful time in it. I like the fact that if/when they poop in it I can just add it to either my compost bin or directly into my garden and then replace with fresh. Seems to work for now anyway. I have read that using peat moss with DE in it will work well when they get big enough to get out into the henhouse and the run.
For SPISH: DE is short for "diatomaceous earth" which is a fossilized type of algae that is a natural insecticide as well as a natural abrasive, often used in cat litter and water filtration as well as a product in blood clotting studies and dynamite. Used in chickens and other animals as a flea & lice treatment as it causes the protective coating on fleas, roaches, etc. to rub off and causes them to dehydrate.
My chickens claimed my flower box! it is the oblong style, about 12" wide, x3' long, and 10" deep. Just plain potting soil. Nothing added. I go with their choice, place it in the coop during winter.
When my chickens were free ranging, they enjoyed an area under some of our bushes which was dirt and pea stones. Not that they are penned up (because the flower beds are planted and I was tired of mulch thrown out of the beds) they have scratched a hole in the dirt and I threw some loose dirt/sand in there. It's funny to see three or four of them laying in a hole for one and trying to bath together.
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I get mine at Agway. Make sure you buy the "food grade" DE only. A fifty pound bag will last a long time! I sprinkle it in the coop bedding and my garden too!
I usually have a large pan (20" in dia.) and fill it with regular dirt and sprinkle some DE in to help with mites and lice. That works well for winter inside the coop.