The orchard is a large yard with apple trees. It must be placed on fertile land like every other farm. The farmer must plant and grow the trees before actual production can kick in. Afterwards, trees periodically yield apples, which can be collected by the farmer. Trees do not have to be replanted between production cycles.
Apples are considerably cheap to produce, due to their relatively low cost and requirements. They however lose value over time, as castle population grows. Moreover, they are not as fast to acquire in the beginning of the game as they have been in previous games.