Answer: The mycelium (white stringy stuff) in your woodchips is part of the natural decompostion process. As long as you use the chips as above-ground mulch on annuals and perennials, there should be no problem. The mycelium will dry up when exposed to sunlight and air. Just as a precaution, don't put the mulch up around the bases of woody plants, or close enough to touch the trunks of trees.
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