Yeah, you can harvest the cacti and replant. There are 36 plants in there, so it should net over 100 cactus "blocks" per harvest and only need to replant 36 "seeds" to regrow the whole thing.
Cactus is useful for passive defense against monsters (and for creating traps to kill them and harvest monster loot).
It is also used for making green dye.
Regarding sheep... I NEED BLACK WOOL, lol. If you guys see a black sheep, please punch him in the face for me and take the wool? When you get the chance, my storage chests are over by the pool area.
:)
Rood, I was actually going to make a sugarcane farm next. So, yay, us!