There has yet to be a clear, exact cause of sarcoids. It is widely believed (based upon strong evidence) that they are initiated by viral infection, such as BPV (Bovine Papilloma Virus). This would be transmitted by flies or other biting insects.
Sarcoidosis is often associated with an animal's weakened immune system, caused by poor nutrition or another illness, as well as trauma inflected to the localized area where the growth is found.