Coated animal feed agglomerates such as pellets are made starting with uncoated agglomerates or pellets that may be formed of easily agglomerated or pelleted ingredients but which may be lacking in desirable nutritional or other ingredients. A binder such as a viscous aqueous gel is coated onto the uncoated agglomerates or pellets. Thereafter, the damp binder coated agglomerates or pellets are dusted with a powder containing ingredients which usually are not amenable to being extruded. After the dusting powder has been applied the coated and dusted pellets are dried and cooled.