What do chickens produce that is useful besides more chickens and how do I get it? Or do they not do anything?

Right now you can murder harvest them for meat. Hug them first for eggs and then smash them with a bat or weapon of your choice.

Truth be told I planned on allowing you to equip hats on them and make them follow you and attack enemies. I still plan on that by the way :)

Oh yeah I'm sorry I tried to hit them in the past but it didn't work so I just assumed you couldn't do that.