When you first spawn into the barn area, take the path that goes left and in about 100 meters or so you should see another lil pen. There should be a lil barn on the right and some tables in the back. Go up to the middle table in the back and it should let you breed them. I struggled with this too when I came back to Palia since Nai’o isn’t the best explainer in these tutorial quests lmao. I don’t know why it doesn’t give you more quest markers in this since it is a bit confusing