You can do cracked or whole grain for fermented. I use a mix with whole barley, whole oats, and cracked corn as the base, so the pieces are all about the same size. That base works well for poultry and goats, probably for cattle also.
You can do it with just water if you don't have some kind of jump-start bacteria, it is just faster if you toss in some yogurt, a little raw milk, live whey, etc.
I've been feeding our chicks fermented grains (no unfermented grains) for quite a while now. The loss rates went way down, some that were wobbly toughened up. No drunken minors either, though this new batch of chicks does have a tendency to fly up on top of the water jars and try to escape the brooder more than the previous batch did!
As soon as I have enough buckets, I'm going totally to fermented or sprouted grains (instead of dry grains) for all of the animals. They'd still get hay, and veg, but all their grain will be fermented.
Someone else can probably explain the fermentation process better than I can, and why it increases nutrients. I don't know the chemistry, I just know that it made a big difference in the health of our chicks, and we don't feed them any commercial chick starter.
I toss in mixed barley, cracked corn and oats, plus some finch seed, thistle seed, cracked shelled sunflower seed (for the chicks - shelled but not cracked for the chickens and ducks), and wheat. For chicks, I substitute cracked wheat instead of whole wheat, and cornmeal instead of cracked corn, oatmeal instead of whole oats. They can transition to the more whole stuff between 2 and 3 weeks, though I do keep them on cracked wheat longer than that because they just grow a bit better that way.
I'll also be adding in rye as soon as I can find some. Was going to order feed two weeks ago, but then we knew we were going to move, and weren't sure it would get here in time.
I keep my feed going for about 1-2 weeks before I start fresh again. Similar to sourdough starter, only more flexible. I use a 1 gallon container, and when it gets down to about 1/4 I refill and get it wet again - but I don't add any milk or whey when refilling. I only have to refill the container every few days, so it isn't a lot of work.
I replace mine periodically because we have a high amount of some mold types that seem to like to settle into the chick feed if I leave it too long.
Nice thing is, it only takes maybe a quarter cup of raw milk, or a couple tablespoons of kefir, or live whey, or yogurt to jump start it, so I don't have to feel like I'm wasting milk if I have to use raw milk.