Police said the female newborn was found inside a trash container in the 600 block of E. 5th Street Thursday afternoon.
Neighbors said the parents who are suspected of leaving the baby in the dumpster are well known and have other children who play around the area. Few knew the woman was pregnant.
They said at first they thought it was a disagreement or even children fooling around, but were later shocked to find out what happened.
"It escalated to hysterical like, 'Where is the baby?'" neighbor Jessica Spencer said.
Another neighbor heard the grandmother, who was upset.
"I heard, 'Well why did she have to throw the baby in the dumpster?' 'Why did she have to throw it out?'" resident Savannah Larson said.
The child's grandmother ended up calling 911. Police quickly arrived and found the newborn in the container.
The child had no signs of life and was transported to a local hospital, where she was pronounced dead.
"The cops came looking for the baby and then they found the baby and then it was still warm. They said it was still warm," one neighbor said.
He was in the back alley and witnessed the entire scene.
"You seen the lady walking to the trash can with the trash right, and then she walked back and I noticed her pants were all full of blood," he said. "Next thing you know, you see the cops come looking through the trashcan for something and they say, 'We've found it! We've found it!' Then you see the ambulance picking up the baby and trying to revive it."
The mother is in the hospital. Authorities said there were no arrests and are waiting for an autopsy to determine if the child was a stillborn or killed.