Speak with Offa in Bastok Markets at F-10 (upstairs) to learn how to make the sausage.
You will need a piece of Giant Sheep Meat. Either buy this now, or wait for it to drop off of mobs in South Gustaberg.
Go to South Gustaberg. In the northeast corner of K-10 is a path that leads up a hill.
At the top of this hill there will most likely be two Goblin Thugs and two Goblin Weavers (as well as two Ornery Sheep) waiting for you. Low-level jobs will catch aggro from the goblins, and there is a chance that they will link; if you are not capable of fighting more than one at a time you may want to bring a friend, wait until you've gained a couple levels, or just buy the sausage from the auction house.
At the top of the hill at K-9 is a campfire. Target the ??? and trade the sheep meat to it. If you still need the sheep meat, kill the Ornery Sheep that are there. (If you don't get the drop right away, there are quite a few more over on Vomp Hill.)
It takes 1 full game day--approximately 50 minutes real-time--for the sausage to cook.
Once you've waited long enough, examine the fire to get your sausage.
Take it back to Hungry Wolf and trade it to him to get your reward.