Dogfood, mostly. And other products where you need protein but taste either doesn't matter, or can be completely overwhelmed by spices.
There isn't very much of a wool industry in the United States. Australia and New Zealand have such large economies of scale that in the US, you literally lose money just by paying someone to shear your sheep. The wool is worth less than the shearer's per-fleece fee. So the problem of "where do all the old sheep go" isn't a very big one.
I expect that either they eat quite a lot of mutton in Australia, or they sell that mutton on markets where it is desirable. But I don't have any data or experience to back that up.
There isn't very much of a wool industry in the United States. Australia and New Zealand have such large economies of scale that in the US, you literally lose money just by paying someone to shear your sheep. The wool is worth less than the shearer's per-fleece fee. So the problem of "where do all the old sheep go" isn't a very big one.
I expect that either they eat quite a lot of mutton in Australia, or they sell that mutton on markets where it is desirable. But I don't have any data or experience to back that up.