Has your Newf had a skin scraping by the vet?
What does your Newfie eat?
Are there any smaller sores like reddened pustules?
Does the dog chew or scratch at the area, is it bothersome to him?
What area of the body is this prevelent?
Do you ever shave the Newf down?
Thank you for that information. The reason I asked about a skin scraping is because my Newfie had some skin problems for about two years. First Vet diagnosed it a flea dermatitis even though he didn't have fleas. Said it only took one flea to bite and hop off to cause a reaction. Then there were the hot spots that would come and go, but he still had a strange skin problem. Went to another vet for second opinion after a year of the problem, and she did a skin scraping that came back as a fungus. Fungus is everywhere, in the air we breath, most people and animals can fight this off through the immune system, some can't. We started him on an anti fungal shampoo once every three to five days. At the same time I started buying products to boost the immune system and strengthen the skin and coat. Brewers yeast vitamins, and omega fatty acids. Changed the diet from pedigree to Diamond Lamb and rice. Its been a year and although every once is a while it comes back slightly, I am able to control it. So I am wondering if this is not a fungal infection of some type that requires an anti fungal shampoo and drops.
Newfies are also prone to Atopy which is usually brought on by an allergies to airborne particles. Atopy is a skin disease that can do much damage to the skin and cause problems for the dog. Normally the dog would be scratching but you said he is not bothered by the skin. I am going to direct you to sites on this anyway as one of the sites has pictures you can compare to your dog. You will probably notice more of a problem in the spring and summer.
The Lab breed, which as you know plays a part in the Newfie breed, is prone to seborrhea which would be attributed to the skin being to oily or not oily enough. This can produce yeast or bacterial infections of the skin. Treatment may be antibiotics and anti fungal medications/shampoos.
The Great Pyrenees side of the Newfie breed is prone to skin allergies, which again involves atopy as mentioned above with the Newfie breed.
I've also found an article on Pemhigus Foliaceus of which the Newfoundland is predisposed to. http://www.dermvet.com/pemphigusfoliaceus.htm
Hyprothyroidism is another disease that would cause skin problems which Newfies are also pone to. It may be worth having the vet test the dog for this.
If the dog has not been checked for a fungal infection I would do this. To aid in dry skin adding omega fatty acids to the daily diet will help to strengthen the skin and coat and show a visible difference within three to four weeks. Derm caps are a good source of this however there are other products on the market for dogs as well. I use three to four fish oil tabs a day which I order from Puritans pride. I would also speak to the vet about food and air borne allergies, possibly have the dog tested for this. However since your vet did mention oily skin then I would see if the dog has seborrhea. Remember a second opinion from another vet is always worth considering. Sometimes the dog may start off with one skin problem then over time a secondary skin problem develops.
Here is more on omega fatty acids. http://www.petplace.com/drug-library/fatty-acids-omega-derm-caps/page1.aspx
puritans pride fish oil: