The infection, confirmed Saturday, compelled the slaughter of 328,000 birds at the huge commercial chicken farm, nearly four times the amount killed when two Delaware farms were infected last month with the flu.
Elsewhere, a Japanese husband and wife apparently hanged themselves Monday after he was accused of covering up a bird flu outbreak in his family's poultry business, police said.
Police found a suicide note saying: "We have caused so much trouble."
Hajimu Asada, 67, came under fire for not telling authorities that chickens on his Asada Nosan farm were dying in large numbers, preventing officials from containing the disease at an early stage. The government had been considering criminal charges against Asada.
Japanese experts also warned that wild crows may be spreading the disease to new locations.
An Agriculture Ministry official in Thailand said Monday his country is free of bird flu and will resume the breeding of chickens next month.
No areas of Thailand have had active cases of bird flu in poultry since Feb. 25, said Yukol Limlamthong, director-general of the ministry's Livestock Department.
The bird flu has already killed or forced the culling of 100 million birds across Asia and killed 22 people in Vietnam and Thailand. Four bird flu outbreaks have been recorded in Japan, including two in the town of Tamba, near Kyoto in western Japan, where the two sick crows were found dead Friday.
"Genetically, we probably would be most likely to assume that it is the same H7 virus that was found in Delaware," Dr. John Brooks, Maryland Deputy Secretary of Agriculture, told CBS Radio News.
Maryland agriculture officials immediately ordered a new quarantine that covers eight farms within a two-mile radius of the infected farm, which grows chickens on a contract basis for Mountaire Farms of Selbyville, Del. The department also began testing 79 poultry farms within a six-mile radius, in case the infection was spread to nearby chicken houses.
The Pocomoke City farm is about 45 miles from the nearest infected farm in Delaware.
Officials emphasized the virus is not a threat to humans or to processed chicken.
"Birds are still being produced daily, they're still being processed daily, and certainly we're still producing an extremely healthy and wholesome product for consumption," said Brooks.
However, it can wipe out poultry farms, especially if it turns up in a highly pathogenic form.
"This virus can be transmitted on contaminated feces, through contaminated feather parts," Brooks said. "It is very adaptive in being able to be transmitted either by human vehicle or by other forms to different sites."
The flu case dimmed hopes that international markets banning U.S. poultry would drop their embargoes, state officials said. Those with a block on imports include the 15-nation European Union, China, Japan, Mexico, Russia and South Korea.
The $1.5 billion industry that makes up more than a third of the economy on the Delmarva peninsula feared the worst after the flu turned up last month in Delaware, growers and industry officials have said. But their concerns had eased over the last few weeks as hundreds of tests conducted on Maryland and Delaware farms found no new cases.
Maryland's last outbreak of avian flu was in 1993 among game birds on a Queen Anne's County farm.
"It's got everyone's palms sweating right now. It's a very serious situation," said Jeff Green, who works for a fertilizer distributor and owns a chicken farm in nearby Marion. "We hope the quarantine will get it under control."
The quarantine means hardships for poultry farmers, who use litter from their chicken houses to fertilize fields that grow grain for chicken feed. After last month's cases, farms north of U.S. 50 on the peninsula were banned from spreading the manure on their fields. That restriction is to be lifted Wednesday, and Deputy Secretary John Brooks said the case likely won't prolong the ban.
But a new, indefinite ban on spreading manure was put into place for farms south of U.S. 50, right at the start of the growing season begins.
"It's going to be a burden. They're not going to be able to do everything on time," Riley said. "Obviously it's going to be an inconvenience for the farmer, but it needs to be done."
Industry leaders and state officials declined to identify the farm to keep away visitors who might spread the disease. But it is visible from a nearby state road, and workers in white plastic bio-security suits were seen Sunday cleaning out the chicken houses as state troopers blocked off the area.
Mountaire Farms officials did not immediately return a call Sunday.
Officials said they discovered the flu in Pocomoke City after a grower reported many of his chickens were dying. The state ordered the slaughter of birds on that farm as well as in houses about a mile away that are under the same ownership. A third farm owned by the grower is two miles away and will be observed this week, officials said.
Poultry farmers waited tensely Sunday for test results that would show if the avian flu had spread on the lower Eastern Shore, Green said.
"You'd be surprised how many farms are mortgaged to the hilt, and I'm one of them," Green said. "We can't afford anything like this."
Officials believe the flu virus may have been transmitted to Delaware on crates or trucks from the New York City live bird market.
The best outcome would be if officials could find a connection between the Delaware cases and Pocomoke City's case, said Virgil Shockley, a chicken farmer and Worcester County commissioner.
"Somebody went somewhere they weren't supposed to," Shockley said. "If that's not the case, then we have a major, major problem."