rare milk fruit as of now only has 2 uses, the first is on tbe farm and can be used after you grow the 2 cow girls 3 stages at which point you can talk to the third one to get a new recipe that calles for a milk fruit to get a 4th stage, the other use is at the witches academy where at night in the left wing basement of the place you can find an npc you can give the fruit to.
I'm unsure, but I know one can be found in the desert oasis after solving the gem puzzle, one in the druid town in the fertility forest, and one at the end of the cowgirl milk dungeon, mabey one more somewhere after the witches academy but I cannot say for sure, use one of them at the cowgirl farm to unlock the ability to buy them from the shop in the area.