Not long after I got Ziggy (a collie cross), she chased a flock of sheep. She was ahead of me on a footpath (no sheep) that went into a field (lots of sheep). Some people coming the other way opened the gate and let her through. She ran the flock across the field, then came back to me - I was calling her the whole time. As we live on a farm with sheep I took this very seriously.
I made her fear sheep by pretending I was scared of them. Whenever we walked through a field of them I would make myself tense up, and if any of them were close, I'd put her behind me like I was having to protect her from them. It worked - she now thinks sheep want to rip her head off and stamp on the bits!
One day we were on the shore where there's a nice walk and a parking place. We went down to the far end and on the way back found about 30 sheep had escaped from their field and were between us and the car on this quite narrow strip of land - and I hadn't got a lead. I got Ziggy to walk to heel through the flock which she did beautifully. And I'll never forget the time some escaped lambs on the farm here ganged up and chased her up the road!
Around livestock, it's crazy not to have the dog on a lead. There was a dog off-lead that was shot and killed a few years back (in the Lakes I think) when it just suprised a couple of sheep from behind a rock. It wasn't chasing them. I think the owner was fined too.