The quality of wool is determined by its fiber diameter, crimp, yield, color, and staple strength. Fiber diameter is the single most important wool characteristic determining quality and price.
Merino wool is typically 3–5 inches in length and is very fine (between 12 and 24 microns). The finest and most valuable wool comes from Merino hoggets. Wool taken from sheep produced for meat is typically more coarse, and has fibers 1.5 to 6 in (38 to 152 mm) in length. Damage or breaks in the wool can occur if the sheep is stressed while it is growing its fleece, resulting in a thin spot where the fleece is likely to break.
Wool is also separated into grades based on the measurement of the wool's diameter in microns and also its style. These grades may vary depending on the breed or purpose of the wool. For example:
- < 15.5: Ultrafine Merino
- 15.6 – 18.5: Superfine Merino
- 18.6 – 20: Fine Merino
- 20.1 – 23: Medium Merino
- > 23: Strong Merino
- Comeback: 21–26 microns, white, 90–180 mm long
- Fine crossbred: 27–31 microns, Corriedales, etc.
- Medium crossbred: 32–35 microns
- Downs: 23–34 microns, typically lacks luster and brightness. Examples, Aussiedown, Dorset Horn, Suffolk, etc.
- Coarse crossbred: >36 microns
- Carpet wools: 35–45 microns
Any wool finer than 25 microns can be used for garments, while coarser grades are used for outerwear or rugs. The finer the wool, the softer it is, while coarser grades are more durable and less prone to pilling.
The finest Australian and New Zealand Merino wools are known as 1PP, which is the industry benchmark of excellence for Merino wool 16.9 microns and finer. This style represents the top level of fineness, character, color, and style as determined on the basis of a series of parameters in accordance with the original dictates of British wool as applied today by the Australian Wool Exchange (AWEX) Council. Only a few dozen of the millions of bales auctioned every year can be classified and marked 1PP.