Apparently, cattle digest cellulose fine, but the lignin in the wood interferes with their cellulose digestion. Treating the sawdust with nitric acid and heat breaks the cellulose-lignin bond and makes it more digestible. (Due to onerous government regulation of nitric acid, the farmer in question went on to develop an alternative method of sawdust processing which doesn't use it, but the article doesn't provide any details on that.)
At least, that's what I learned when I took a course on ruminant nutrition and digestion when I was a graduate student at UC Davis.