Abstract: A pelleting system and method for pelletizing a cellulosic fiber into feed pellets. The pelleting system includes a mixer adapted to combine a shredded cellulosic fiber with at least one additive and a preservative to form a mixture; a pellet feeder for injecting said mixture into a conditioning chamber, the conditioning chamber adapted to apply steam to the mixture to add moisture and heat to said mixture for softening the mixture to facilitate pelletizing; and a pellet mill adapted to compress the mixture to form feed pellets. The final product may be a feed pellet having a compression ratio between about 7 L/D and about 16 L/D and containing between about 9 wt. % moisture and about 12 wt. % moisture.