Do my animals need fences?

I have a barn and a coop. Each has several animals in. Because fences keep deteriorating and get in the way, I didn't build any. The animals can roam freely around my farm.

Is there a downside to this? Will the animals eat my crops or escape if I don't enclose them?

Solution 1:

They will not escape or suffer negative consequences, but it will potentially make collecting produce (such as truffles, milk, etc) more difficult due to the increased area that it might 'drop' in.

By fencing the animals into a smaller area, you can easily predict where any produce will appear - though if you wish them to graze (reducing the hay-cost for the day) they will need some long grass in the fenced area.