Wow, you are most definitely in a different part of the world.
Here's how it is HERE. We pay minimum $7.50 per sheep to the shearer (minimum price $75 for coming out to the farm, so if you have less than 10 sheep, you're paying a lot more per sheep), and that's for a quality of shearing that is inappropriate for mechanical processing. For those of you who don't work with wool or sheep, what happens is the shearer takes second cuts, cuts twice in the same place, so that you get uneven fibre length and all these nasty little bits that creates noils and pills. It can also clog up machinery. You often have to pay more for 'fibre' quality shearing, or have an in with the good shearer.
Now, if by some miracle, you got your nutrition right for wool production -
Which is NOT necessarily the same nutritional regimen and shearing schedule as for optimum meat production - and the fibre does not have a 'break' or is not 'tippy' then you may be able to sell your wool to the wool board - who on a good year pay 20-50 cents per pound for a 'meat' wool. Break or tippy wool is where the animal experienced a time of stress, both good or bad stress, or a change in nutrition, both good or bad, and the individual wool follicles didn't grow as thickly as normally do, so that the wool breaks when pulled on, or processed, creating a fibre that will pill easily or even jam up some of the more sensitive wool processing machines.
To sell to the wool board, you have to have access to the bailing machinery (another expense), and more importantly you have to have
enough wool to make a bale. 400 pounds of wool? I get an average of 5 pounds per sheep for my fibre breeds, I would need minimum of 80 sheep, more like 100 because the wool needs to be skirted (dung removed) and sorted (undesirable fleeces removed) prior to packing.
And then there is the great fun of dealing with the bureaucracy of the wool board or coop - quite often they are government sanctioned and you have to jump through that red tape as well.
And then there is getting the wool to the centralized wool sorting stations. Shipping is usually more than the price paid - so leaving the wool on the farm we are only losing a bit, moving it from the farm we are loosing a lot... hmmm, yes, farmers are a practical lot. That's why a lot of them compost or burn their wool
here.
That's what selling a bale of wool is like
here. Most years it costs more to sell, especially wool of inferior quality, than you get for it. "Unless we are growing a wool breed, why pay to send the wool off farm when they can just burn it for free?" say the
local sheep farmers.
A great deal of farmers don't have that many sheep. These farmers are a lot like the people you may find on this permies forum. We have small plots of
land, and even if we had enough land to raise 100 plus sheep, we wouldn't necessarily want to.
So, basically small farmers, with only a few dozen sheep, don't have access to the same resources as industrial scale farmers - One of these days, I'll wake up and this statement will be obvious to the world... but until then, I'll be a broken record on the subject.
A few are clever enough to have duel or even tri purpose breeds (wool, meat,
milk), and are self reliant enough to either process their own wool, contract with a local, small scale mill to process it for them, or knows the local fibre artists market who will pay upwards of $4 a pound for unwashed wool, and upwards of $12 for processed, ready to work with wool. Then again, most farmers here don't have a way into that community and it's all about who you know when selling direct to the customer.
On top of that, a lot of farmers who grow sheep for selling lamb meat don't realize their fibre can be used. They are informed that these are meat sheep, and other well meaning farmers tell them to toss the wool. People have forgotten that wool can be used, no matter the quality.
These are the people who gladly give away wool. They usually have less than 100 sheep and are under the impression that their wool is a financial drain, not a resource.
Of
course even meat wool can be used for carpet making or felting, even if it's not strong enough to undergo the rigors of industrial or mechanical processing (ie, tippy, second cuts, &c), it can still be hand worked.
If I was using wool for insulating a moving object, I would definitely wash it and felt it in big giant sections. So that each wall is one large felted section. This is much larger than what most machine felting can do. But is not all that difficult by hand. Or, I should say, by foot. Search Traditional Yurt Felt Making and you should be able to see the method I mean. It helps to have friends. Cook them a nice lunch while they do the felting for you.
Carded wool batts would work well too, but I agree, it would probably compact over time. A felted wall covering could be decorative, then it wouldn't need to be hidden between walls. Faster to make than a woven one, but then again, woven wall rugs and tapestries have their own charm.