I was reading a news item on the CNN website (it can be found other places, too) that has the headline, "Cows' compass is pure animal magnetism". One of the quotes in the article, though, has the scientists saying, "The magnetic field of the Earth has to be considered as a factor." So, in other words, the cows' sensing and reacting to the Earth's magnetic field is just one of the possibilities. Other possibilities that are mentioned are that the cows are just trying to stay cool by exposing a smaller dimension to the sun. Another possibility mentioned in the article is that perhaps the cows are aligning to the fences which may tend to be aligned north and south. But the editors just couldn't resist all the puns that go along with cows lining up with the compass.
It reminds me of a story I heard at our college. Supposedly a guy at our school, who was an avid outdoors man, always slept with his head oriented North. He supposedly did this to "tune" his body to the Earth's magnetic field so that someday he might be able to sense North if he was lost, without a compass and unable to see the Sun or the stars. It is probably just a story but it's fun to think about.