Why is dairy farming done mostly in dry areas?

I am sorry! Dry area is not a prerequisite for Dairy Farming.

The above answer has it absolutely right. Dry areas are where poorer forage is produced, forage that is much less in quality and quantity than areas that are moist. Dairy cattle need forage that is in high quality and quantity in order to produce significant amounts of milk. A high-milking cow needs to be in an area where forage is abundant and in good to Excellent quality. A cow that tends to not produce much milk (like a Hereford beef cow, for instance) is better adapted at being raised in dry areas. Thus, beef cattle farming is better suited and done mostly in dry areas, whereas dairy farming is better suited in moist areas where quality forage can be grown and harvested.