In a "cycled" tank with fully functioning biological filtration, the following processes take place:
1. Ammonia (NH4) is released into the system through organic decay and/or animal waste. The "normal" conditions in the portion of the system (= tank) that the animals live in are aerobic (rich in oxygen). There are also lots of "good" bacteria present.
2. Under these aerobic conditions, one type of "good" bacteria (Nitrosomonas) converts the Ammonia into Nitrite (NO2).
3. A second type of "good" bacteria (Nitrobacter) converts the Nitrite into Nitrate (NO3), which is less toxic than Nitrite and Ammonia. This Nitrate can be removed by water changes and is often used as a nutrient by live plants in a tank.
4. In a tank with a deep substrate or with deep, porous filter media, there are also anaerobic (low or no oxygen) microhabitats present. These anaerobic conditions add another step to the process, by allowing another type of "good" bacteria to thrive which break apart the Nitrate (NO3) into free, diatomic Nitrogen gas (N2) and water (H2O). Nitrogen gas is essentially harmless and makes up the largest portion of the air we breathe.
Answering these few questions will help immensely:
How long has the tank been set up?
How warm is your tank?
You appear to have a relatively deep substrate, meaning step #4 (described above) isn't out of the question. How deep is it?
What sort of filtration are you using?
Are you feeding that much EVERY DAY? If so, I'd suggest that you're heavily over-feeding. That could be contributing to the elevated concentrations of nitrogenous waste you're seeing.
-Cole