To be clear, not all blues are cheap. Woad faded-blue-jeans blue is cheap. A lovely intense Virgin Mary blue is expensive. Don't know how you'd achieve that one on cloth. In high class art it was achieved by powdered lapis lazuli and horrendously expensive.
Regarding a sheep farming community and wool production.
People handling sheeps wool a lot a) honk of sheep and b) may well have good skin on their hands from the lanolin.
(Some) Tall people get back trouble when bending over shearing sheep. Short and stocky is a more practical.
It takes 8 carders to keep one spinner working full time and 8 spinners to keep one weaver working.
Carding is really hard work on your hands.
17th century men used to be carders and spinners as well as weavers, but there were a lot of women spinning too - spinning houses would be set up where single women could live and support themselves (in the basics) by spinning wool - hence spinster.
Carding and spinning on a drop spindle or distaff can be something you pick up and put down and work on while walking - well at least a distaff, drop spindle would be a little harder - thinking walking with a yo-yo.
You'd also need linen production for community use - stands of linen, retting ponds, combing (not carding) and a distaff for spinning it. (Don't think that linen could be spun on wheels, not sure, you'd need to check.) Retting - as in rotting - plants to get the long fibres out of the stems is another stinky job.
Have you read Ellis Peters Brother Cadfael? They ring true on details to the best of my knowledge - though said knowledge doesn't go back to Medieval period.
ETA
Did a search for how to achieve a deep blue in the Medieval period. This blog looks interesting
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Also - all sheep are not equal in terms of wool. The higher altitude/wetter climate a sheep lives the coarse and thicker the wool tends to be - so Herdwick wool makes great long wearing carpets and blankets but scratchy jumpers. Upland sheep tend to be tougher and more independent minded than lowland sheep - who tend to have softer wool. I'd do some reading about rare breed sheep if I were you, for background authenticity of the community. Basically wild sheep were selectively bred to be easy to handle, chunky in meat production and to have soft wool - but sheep like that can only live in the lowlands and away from predators, or with high quality shepherding.
Anything needing to live in harsher climes or around predators need more nouse - but will be harder to handle because they try to outthink people (and some can).
Depending on your setting, look up guardian dogs and current sheepherding practice in places like Norway and especially Romania - and look up transhumance - effectively still going on today even with settled community - following the seasonal grass.