> Wool is a free by-product, sheep have to be sheared
One of the problem here is that while yes, you have to shear sheep raised for meat, the wool is going to be of an exceptionally low quality, because (a) you generally aren't raising a wool breed for meat, and (b) you aren't keeping your sheep in a manner that minimised damage to the wool.
We receive a fair bit of free by-product wool from meat herds, the processing cost is roughly double that of wool from a proper wool herd, and the end result is inferior.
The best use of by-product wool is often quality-insensitive bulk applications, like wool pellets for roof insulation, at which point there is very little money in the whole value chain
> sheep have to be sheared
Not sheep raised for meat, bred to be low wool volume producers, and regularly (two or three times a year) run through a defoliating spray.
See, for example: https://farmtable.com.au/ag-library/ag-business-resources/se...
FWiW, in the actual sheep for wool trade there's still a high demand in China for ultrafine low micron merino wool for modern high end breathable suits. So:
> Then, everything closed and the only thing left was to send it to China.
really depends on the grade and quality of the wool - a lot is low grade rag fibre for stuffing and insulation, some (many tonnes per annum) is for quality tailoring.