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Occasionally you’ll come across a skein of yarn labeled 100 percent Pure Virgin Wool. No, this is not referring to the sheep’s modesty. It’s a reference to the days when people would sell their old knits and woven goods to shoddy mills, where they would be unraveled or shredded and re-manufactured into blankets or yarn. By putting Virgin Wool on a garment or yarn label, the manufacturer is indicating that this is the fiber’s first foray into the world of textiles. If you were to knit a wool garment, unravel the yarn, and re-knit it into something else, technically it would no longer be virgin wool.
Sheepy Hollow Farm 
I have heard virgin wool described as not just the first use of a wool, but also from a lamb on his/her first shear. The end of the wool will be tapered as opposed to square from previous sheers giving a softer/finer quality. I’m pretty sure this is what the fashion fabric/ready to wear clothing defines as virgin wool.
Many factors determine the quality (and value) of wool: fiber diameter, crimp, yield, color, purity, and staple length and strength. First clip/first shear are thought by some as best quality as age/other factors influence wool quality. Also, with wool growth, there’s no square vs tapered ends from previous clips.