Natural Insulation

Background: someone told me that sheep farmers in Canada end up burning the wool from the meat sheep, because the wool has no value. (It's coarse, and is shorn for the efficiency of getting it off, not for spinning and using, and thus has second-cuts.) In a magazine, I was reading that it's now possible to buy insulation for homes, etc, made from recycled cotton.

Idea: Make insulation batts out of the wool that would otherwise be burned.

Pros:
1. Wool is a very good insulator, and even insulates when wet. (Good when you have an unwanted leak.)
2. It uses something that would otherwise be waste.
3. Wool is mildew and fire resistant.

Cons:
1. I have heard that wool can spontaneously combust, but I think it's only if it is both wet *and* compressed... and even when it does, I think it only smolders. (After all, you never hear of wet sheep bursting into flame, and they certainly spend time out in the rain.) A flame-retardant might be required if this is true... or simply instructions to not install it improperly.