Wool sheep have been selectively bred to produce far more wool than is natural, creating welfare problems that require annual shearing as a medical necessity.
The welfare paradox of wool is that shearing is both a cause of stress and a welfare necessity for modern sheep breeds. The real welfare issue lies in the conditions of shearing — speed incentives, rough handling, and inadequate training cause injuries. Mulesing without anesthesia to prevent flystrike is a major welfare concern.