I have a pink skinned draftie. She scalds from almost every commercial fly spray on the market. Looks just like what you are describing. I’ve found one by Arbico - Espree Aloe - that is effective an doesn’t burn her. BTW many other grooming products also irritate her skin. I can’t use Microtex products at all.
Oil-based fly sprays like Endure that are made to last several days tend to attract tons of dirt and grime and draw up gunk from the horse’s skin. My horse gets the black sticky-looking stuff and I believe it is just the dirt and grime attracted by my Endure. He also gets flaky skin on his elbows and other random spots on his body that can be attributed to sunburn or just the ‘summer grunge.’
I also used to use Pyrhanna and it caused black scurf of my mare’s neck…I guess the reason it worked so well is because it is so potent 
So after stopping use of my fly spray (Tri Tech 14) except for maybe once a week, my horse’s skin has stopped peeling (black skin funk)… so I guess it really is the fly spray causing a reaction and not so much the sweat in my horse’s case.
Well I’m in AZ and this time of year my mare gets the same nasties…I think it is from the moist monsoon weather and the flys…I have found that by using fly spray the skin conditions get worse- I hose my horses daily after coming in from turn out, and about twice a week wash with medicated shampoo of some kind-- I also think I have found a more natural solution to the flyspray-- I get the apple cider vinegar with “the mother” and mix 50/50 with water. that seems to keep the flies at bay. I’ve been noticing that the more fly spray (tri-tec, ultrashield, bronco etc) I apply the worse the flies bother them, plus I am tired of spending 20dollars for a bottle of fly spray! out here we have mesquite trees and all of the horses like to scratch on them-- mesquite trees have a lovely oil in their bark that seems to irritate the skin of horses-- hence the need for bathing twice a week:)
my horse is having this too what did you do/ what did you find most effective? 
thanks in advance
