A system and method for treating or processing granular absorbent while the granular absorbent is being transported in a fluid stream that preferably is a stream of air. The system includes a pneumatic conveyor with a conduit that draws pellets exiting an extruder into the conduit drying the pellets as they are transported through the conduit. Material can be introduced that dries, coats or otherwise treats the pellets while the pellets are transported through the conduit. Coating material, e.g., powdered bentonite can coat and also dry pellets during transport. A conduit can have inner pellet treating surface that abrades pellets transported through the conduit producing smaller fines that can be packaged with pellets forming a granular absorbent product that forms clumps on top that extend generally horizontally.
