A new system is being trialled in North Yorkshire in an attempt to cut the number of sheep stolen in the county.
The TecTracer system ingrains thousands of coded markers into the sheep's fleece so its farm can be traced.
If an animal is stolen, the system can alert the police and nearby farms.
According to the NFU Mutual Rural Crime Report 2016, livestock rustling remains a huge problem with a total cost to the UK of £2.9 million a year.
"Sheep stealing is a major problem for the whole of the UK, but in recent years the North East has been particularly hard hit," TecTracer director John Minary told ITV news.
"We have been working closely with North Yorkshire Police's Rural Taskforce and the farming community, and TecTracer is now being piloted on farms in North Yorkshire.
"Once the microdots have been applied to a fleece, the unique identifying numbers are then uploaded to a database.
"And, if an animal is stolen, our early warning system then swings into action alerting the police, other farms, abattoirs and livestock auctions.
"By having sheep protected by TecTracer it will certainly make would-be thieves think twice before contemplating stealing them."
Simon Clapcot, a PCSO with North Yorkshire's rural task force, said it offered a modern answer to older systems such as tagging sheep.
"Tags can be cut out and replaced giving the sheep a new identity but this remains on the fleece close to the skin and even shearing doesn't remove it."
