The dairy farm is the source of cheese for civilians to eat. The farmer must bring up cattle before cheese production starts. Once started, cheese is produced faster and in larger quantities than apples, but it falls short to bread production.
Cows can also be used as 'ammunition' in siege warfare. Catapults, war wolves and trebuchets can fling cattle carcasses to a location, which spreads disease clouds in a short vicinity. Unlike previous games, cows used this way are not 'consumed' and instead put on a separate cooldown for the siege engine using them.
Dairy farms are also required for tanners as they need the cows to produce leather bodies. When producing leather bodies, make sure to have enough dairy farms on-hand to offset the lost cows.