This is one of my grandfathers favorite sayings. I have often used it and understood the meaning from context, but I recently found a piece some one wrote on the origin of the saying.
"“To tell someone how the cow ate the cabbage” means to tell the person the unvarnished truth, even if the person would rather not hear it. It can also mean to state one’s opinion forcefully or to “tell someone off” (”The mechanic had been jerking me around for weeks, promising that every new repair would fix the problem, so I finally told him how the cow ate the cabbage and drove home”).
“How the cow ate the cabbage” is a folk saying of the southern US, most often heard in Texas and Arkansas, and probably dates back to at least the 1940s. It comes from the punchline to a joke that would, in that period, have been considered at least slightly “off-color.” Here goes:
A circus had arrived in a small town, and one morning one of the elephants managed to escape. The fugitive pachyderm made its way to the backyard garden of an elderly (and very near-sighted) woman, where it began hungrily uprooting her cabbages with its trunk and eating them. Alarmed by the apparition in her garden, the woman called the police, saying, “Sheriff, there’s a big cow in my garden pulling up my cabbages with its tail!” “What’s the cow doing with them?” he asked, to which the woman replied, “You wouldn’t believe me if I told you!”
Hey, I never said the joke was actually funny. In any case, the nicely alliterative “to tell someone how the cow ate the cabbage” quickly came to be a Southern catchphrase meaning “to tell someone a truth they don’t want to hear” (which, of course, is exactly what the woman in the joke refuses to do). In the “tell someone off” sense it also carries the rude implication of telling someone where they can stow the matter or object of contention."