Owls and other raptors, as you may know, maintain a diet primarily, if not exclusively, of protein. In other words, they eat other animals.
Raptors are unlike humans who can cut, cook, and otherwise prepare our food to eliminate the indigestible portions. They also differ from carnivores like wolves that can tear the meat away from indigestible things like bones.
They often feed on small animals like rodents and smaller birds. Weeding out the digestible from the indigestible parts of small animals like these when you only have a beak and talons to do so with isn't always easy. The solution that raptors have come up with is casting pellets.
As a raptor digests its meal, its body separates these indigestible parts such as bones and fur. This material binds together and is later expelled through an action that very much looks like the bird is vomiting. They are not vomiting however, and it is not the same thing as a cat expelling a hairball either.
Many people at one point in their lifetimes, whether it was in science class or just for fun, have dissected owl pellets. If you haven't had the pleasure, these pellets appear as small forms of bound up fur. Often you can see small bones if you look closely.
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