The question could ask about any aspect of wool, its production and how it is used.
Wool is a natural fibre that comes from sheep. It comes in different thicknesses and qualities depending on the breed of sheep. Wool is a sustainable and biodegradable fibre so is environmentally friendly.

The Manufacturing Process
The major steps necessary to process wool from the sheep to the fabric are: shearing, cleaning and scouring, grading and sorting, carding, spinning, weaving, and finishing.

1 Sheep are sheared once a year—usually in the springtime. A veteran shearer can shear up to two hundred sheep per day. The fleece recovered from a sheep can weigh between 6 and 18 pounds (2.7 and 8.1 kilograms); as much as possible, the fleece is kept in one piece. While most sheep are still sheared by hand, new technologies have been developed that use computers and sensitive, robot-controlled arms to do the clipping.

Grading and sorting
2 Grading is the breaking up of the fleece based on overall quality. In sorting, the wool is broken up into sections of different quality fibers, from different parts of the body. The best quality of wool comes from the shoulders and sides of the sheep and is used for clothing; the lesser quality comes from the lower legs and is used to make rugs. In wool grading, high quality does not always mean high durability.

Cleaning and scouring
3 Wool taken directly from the sheep is called "raw" or "grease wool." It contains sand, dirt, grease, and dried sweat.
To remove these contaminants, the wool is scoured in a series of alkaline baths containing water, soap, and soda ash or a similar alkali. The byproducts from this process (such as lanolin) are saved and used in a variety of household products. Rollers in the scouring machines squeeze excess water from the fleece, but the fleece is not allowed to dry completely. Following this process, the wool is often treated with oil to give it increased manageability.

4 Next, the fibers are passed through a series of metal teeth that straighten and blend them into slivers. Carding also removes residual dirt and other matter left in the fibers. Carded wool intended for worsted yarn is put through gilling and combing, two procedures that remove short fibers and place the longer fibers parallel to each other. From there, the sleeker slivers are compacted and thinned through a process called drawing. Carded wool to be used for woolen yarn is sent directly for spinning.

5 Thread is formed by spinning the fibers together to form one strand of yarn; the strand is spun with two, three, or four other strands. Since the fibers cling and stick to one another, it is fairly easy to join, extend, and spin wool into yarn. Spinning for woolen yarns is typically done on a mule spinning machine, while worsted yarns can be spun on any number of spinning machines. After the yarn is spun, it is wrapped around bobbins, cones, or commercial drums.

6 Next, the wool yarn is woven into fabric. Wool manufacturers use two basic weaves: the plain weave and the twill. Woolen yarns are made into fabric using a plain weave (rarely a twill), which produces a fabric of a somewhat looser weave and a soft surface (due to napping) with little or no luster. The napping often conceals flaws in construction.
Worsted yarns can create fine fabrics with exquisite patterns using a twill weave. The result is a more tightly woven, smooth fabric. Better constructed, worsteds are more durable than woolens and therefore more costly.

7 After weaving, both worsteds and woolens undergo a series of finishing procedures including: fulling (immersing the fabric in water to make the fibers interlock); crabbing (permanently setting the interlock); decating (shrink-proofing); and, occasionally, dyeing. Although wool fibers can be dyed before the carding process, dyeing can also be done after the wool has been woven or knitted into fabric.

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