There is an option to kill off a tamed ovis. If you equip a weapon or tool and you open the radial options for an ovis, you get option "slaughter" which kills the ovis instantly. I stumbled apon this wyle drowning them for there meat.
You should use Ovis for a mutton farm because mutton is like a less effective type of kibble. Most dinos Love mutton so this is a very useful way to use these!
If you wanna get wool without having to get ovis by just geting vegie cake make a cage with dino gate then get a argy to transport it into the cage then just simply shear it with scissors.