Is it shedding, or is it him rubbing his butt along the fence, and rubbing his hair out? Is it on his tail too? If it was a reaction to the MTG, it would have happened shortly after you applied it, I'd suspect either worms causing him to itch, or he's got dandruff or rain rot, and has been trying to scratch the itch on the fence. I would worm him, and if he's got rain rot on his butt, then I'd apply more MTG, it helped my horse immensely, I applied it every couple of days, as needed. As long as there was a nice coating of MTG, I wouldn't reapply, but as soon as it started drying, I'd apply more, and then every weekend I'd wash off her rear end with a mild soap, or a medicated shampoo if you have one, then I'd reapply the MTG as long as there were scabs. As soon as the scabs went away, I'd wash her butt, and stop applying MTG. He could also just be itchy because he's shedding, so I'd also take a shedding blade, and remove as much of the shed hair as possible, and see what else you find as you are grooming him. Good luck.