Hi Coral,
my pony has rubbed his butt sore for years every summer, even though I kept spraying him to keep the bugs off. I actually think that they might be rubbing their butt because the belly (or as otherwise suggested the sheath) is itching. There has also always been a spot on his belly that was rough and the flies liked to go there. I have had bad experience with using too much commercial fly spray so I make my own. This year I have sprayed him at least twice a day on his belly and under the tail and around the head of the tail. So far he doesn't have the rough spots on his belly and he is barely scratching his butt. On heavy insect days I dab on some undiluted essential oil of cedar wood on his belly and under the tail. I make my own fly spray with water, Avon Skin So Soft, and a mixtures of essential oils (Peppermint, Eucalyptus, Rosemary, Cedarwood, Geranium Rose, Lavender) and some Flicks. Works as well as the commercial stuff, and my horses don't run from it when I spray them, and it smells divinely. It doesn't last but a half day, but in my opinion neither does the commercial stuff, unless you go heavy duty, which has caused my horses some problems in the past. Hope this helps.
Claudia, OH
NRC11/08, NAT 02/09