The cattleprod is a members-only quest item used only during the Sheep Herderquest. It is found near the incinerator. When wielded, players can "prod" the sick sheep with it, so the sheep move to the opposite direction where they were prodded, and move to the enclosure. Upon completion of Mourning's End Part I the sheep can no longer be prodded.
If lost, it can be re-obtained from the incinerator area if players kept their Plague jacket and Plague trousers from the Sheep Herderquest. If you try to enter without the Plague set, the player will refuse to enter and says:
It doesn't look very safe in there. I'm not going in without decent protective clothing.
Alternatively, the cattleprod can be re-obtained by standing just right of the gate and using Telekinetic Grab on it.