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There are actually two ways used to kill feeder mice by breeders. The one is more cruel than the other but unfortunately widely used. It is by braking the spine. I am sure that you do not want to do that because of what you have written. The otherway it is done is to set up a Co2 chamber which is much more benevolent and a peacful death for the mice. This is a link to a discussion in a Reptile forum I belong to that Explains how to make a chamber for the mice to use as feeders: http://www.herpcenter.com/feeders/3855-best-way-pre-kill-rodents.html
Unfortunately they both seem cruel, but they are prey that are big feeders in the food chain and as you said they can be quite expensive to buy on a large scale. Most of the reptile people I have worked with do raise their own feeder mice. Please let me know if you have further questions. Joan
I'm just following up on our conversation. I hope the information was helpful.