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Depends on the time of year to help with management - mainly as above to identify if and which ewes have been friendly with which ram so you can be sure who is doing their job properly (if one ram's colour never comes up he's off to the butcher!) but also, once the lambs are born you can tell if traits belong to particular rams.
At other times of year a bright blob of colour can identify a sheep through binoculars at a distance if you need to follow up treatment for sore feet or whatever without gathering them all in.
We also use it at scanning time (yes, just like human pregnancy) to group singles, twins or triplets so they get appropriate rations.
Where farms have hundreds or even thousands of acres of hill ground, each will have his own high vis mark - like green shoulder, blue bum etc and that helps identify strays at a distance.