Firstly, I think your mother-in-law is just rude. As everyone said before me, it's none of her business. But sometimes people will keep saying things when they know or feel that you are reacting. My parents did this to me a lot. The attitude I adopted was the "so what" attitude. I was always like, "So what there's hay. There could be worse things. Baby vomit or cat poo." They would point to droppings and say they're unhygenic, and I'd be like, "I don't care." I even said to them that I love rabbit poo and to me it smells wonderful, and that if I had to eat poo, I'd pick rabbits'. My parents got really annoyed with this approach right away, and especially my dad, he even stormed off! I was always like, "You don't like how I keep my rabbits. So what. I don't care about what you think. When I do, I will ask for your opinion. I'm not asking for your opinion on how to keep my rabbits or whether this is acceptable to you. They are happy and it makes me happy."
They have left me well alone now. Everything has changed. It took years, and lots of remarks on the lines "You love them more than you love us" to which I'd just say don't be silly. They realised that my rabbits are my everything.
Funny thing is, they have a dog, and they had two dogs pass away. It was the most awful tragedy for them. My mum actually said she grieved more for her dog and was more upset than she was when her father died. But when my rabbit died, they were saying I had to stop being silly about it, and that it's just a rabbit, and it's normal that they died, that they don't live long anyway, and that I cannot possibly allow myself to be upset because it is unreasonable! Even some really awful remarks which I felt tainted the memories of my rabbit. I was disgusted. I turned them remarks right around and said them back about their dead dogs and the living one too. My dad was horrified. He said, "Do not even compare my dog to your rabbits!" I said "You are upset and I'm glad you feel that way. Because that is exactly how your remarks make me feel."
I know that what you are going through is very hurtful. It is awful. They are our children and our best friends and it's very hard to listen to someone insult them and belittle them. My advice give them back what they give you. Insult their pet and say "I don't mean that, I am just saying this so that you realise how you make me feel." Or just adopt "So what, it's just hay" and "So what it's just poops" attitude. I always even pick a poop up and crumble it in my hands and say, look, even the poop is just hay. Once people realise you don't care about what they say, they are likely to leave you alone.
