From www.compassionatecooks.com, by Colleen Patrick-Goudreau:
"On the surface, wool seems like it would be a humane product. Unlike obtaining leather from cows, it’s not necessary to kill sheep to take their wool. However, taking wool from sheep is an industry and because it’s an industry we can guess that the sheep’s well-being isn’t taken into account. As you can imagine, for mass production and efficiency, there are huge numbers of sheep on a farm and managing these numbers and keeping them all healthy is near impossible.
Like other furry animals, sheep build up their wool to keep warm during the winter and they shed it to keep cool in the summer. However, if they shed their fur it would be much more difficult to harvest it for our use, so they are sheared before they would normally shed. For the sheep this means that their bodies are left unguarded against the elements and many die from exposure.
Sheep have now been bred to not shed their wool and unfortunately are now dependent on shearing. Although sheep must be sheared, in no way is it for their benefit or well-being. Shearers are paid by volume, not by the amount of sheep they shear, so they go extremely fast without much regard to the sheep. As you can imagine, the sheep are often cut by the shears which also often result in infection.
Once the sheep are too sick to carry on, they are shipped to a slaughterhouse. The word shipped is actually quite literal because they are usually shipped from Australia to the Middle East/Africa. (You may have heard of the Cormo Express. In 2003 it was refused by a port, and it was at sea for much longer than planned. The sheep were confined for much longer that what anyone would consider humane.) They are usually slaughtered after around 4-5 years (rather than the 15-20 years they would normally live).
I’m sure there are humane ways to “harvest” sheep wool, especially because most modern breeds need to be sheared. However, because most wool comes from huge production plants, do not believe that the sheep are treated humanely."