It is true that neonatal mice and rats (up to 10 days old) are resistant to hypoxia and take longer to reach unconsciousness with CO2. The guidelines from the National Institute of Health (who oversees all funded institutionalized lab research) does allow CO2 use for neonates as long as death is verified after. The other acceptable methods that they list are injectable anesthetics, decapitation or cervical dislocation. I've personally, never heard of suffocation being used as humane way to euthanize neonates, but my point of view is from the "lab research" end of things. I would think this would be the same situation as with CO2.
I've used all of these methods for adult rats and spent over 10 years decapitating 2-day old rat pups. Decapitation alone was usually not good enough. My last animal protocol had to state that the decapitated heads were immediately placed in liquid nitrogen.
I think for the average hobbyest, the most practical method would be cervical dislocation. I don't know what is being used by rodent breeders and suppliers (I've always assumed CO2) but it would be interesting to find out.
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Maria
Alaska Reptiles
"Life is like a box of thayeri eggs..."