Sheep won't shrink smudge, due partly to the lanolin secreted from their skin and into the wool.
I used to sell health and beauty products, a few containing lanolin. Customers would often recoil in horror because some people are allergic to it, tho in fact very few are.
I would try to explain it's benefits by jokingly asking when, despite them being out in all weathers, did they last see one with chapped skin!
My question was tongue in cheek, but thank you for your informative answer rb. I did already know about the lanolin, but am sure others may benefit from knowing. ;o}
P.S. If you could have heard how Elvis (on Radio 2) tried to put over the answer - it was hilarious!