Wool grading and classification is done on the raw sheep wool. Raw wool is the fleece just clipped from the animals (no washing or processing). It still contains lanolin (a fatty secretion produced by the animal) and may contain vegetable debris and dirt.
The variations in the properties of sheep wool and the various uses of this multifaceted product has resulted in a classification and grading system that serves to sort and collect similar types together for sale to a large scale market.
The wool of often classified according to type and then further graded for sale.
The Western Canadian Sheep Producers Manual states that "in Canada wool is classified based on origin which often reflects the breed suited to that location."
"Western range from range flocks"
"Western domestic from farm flocks"
"Eastern domestic from farm flocks"
This simple classification order is the start point of the process in Canada.
Since the fibre thickness plays a role in many of the properties of wool that make it the versatile material it is, the fibre thickness is a main consideration when grading. The second grading feature will be the length of the fibre.
An experienced person grading wool will grade it according to several factors taking into account breed and type of wool, spinning quality (count), the length the color and the strength among others. There are many finer points to grading and classing wool and, if you able to get your hands on it, a thorough (albeit a little sluggish) read on the topic can be had in the book Sheep and Wool Classing by T.B. Harmsworth and J. Page-Sharp.
A short description and pictures of the wool grading process can be found on the Canadian Cooperative Wool Growers Limited web site under the links About Wool and Grading your Wool. If you raise sheep this is a site worth checking out.