Animal feedstuff having beneficial properties is obtained by adding to a substrate one or more fungal species of the kind that excretes substances into said substrate during its growth which are beneficial to the health, growth or weight gain of an animal, or animals to which the feedstuff is intended and allowing the fungus to grow and/or ferment on the substrate. Suitable substrates are cereal grains, residue of cereal grains, agricultural primary products, agricultural waste products, and other cellulosic materials or a combination of one or more of the same. Suitable fungus species include Cordyceps species, Ganoderma species, Grifola species, Trametes Species, Lentinula species, Antrodia species, Agaricus species, Tremella species, Pleurotus species, Lentinus species, Polypore species, Agaricales species, Ascomycetes species and Basidiomycetes species. Some substrates such as certain agricultural waste products and cellulosic material are not suitable for animal consumption per se but become suitable as a result the fungal growth and fermantation by the fungus or fungi on and in them.