I wouldn't treat the yard per say as lice live ON the host.
Permethrin spray... after dark, after roost... no chasing. A small spritz just below the vent, under each wing pit, and to the back nape of the neck... since there are many types of lice that inhabit only one part of the body like the head. Make sure feathers are parted so spray hits the skin...
https://www.horse.com/item/fly-rid-plus-spray/E006407/
This one is ready to use, safe, effective, no withdrawal time for eggs, and labeled for use in chickens. Sold in the equine section. For under $8, it lasted me 2+ years with 82+ birds, 2 large goats, and 3 medium dogs. I bought it for mosquitoes but discovered a whole host of other on label uses. I don;t like powders as I consider them harder to use and caustic to breath. DON'T waste time trying DE!
It is sold under other brand names and concentrated forms that you mix, like Martin's. Be sure to retreat in the correct amount of days... in order to disrupt the life cycle and not just create resistance to the drug by the next generation that hatches.
Considered ineffective on scaly leg mites and depluming (very rare) mites .
Good luck!
