Dry patches of skin on my 2 year old. what is it and what causes it?

Possibly eczema: Could be a number of things but most likely is a mild case of eczema. Eczema is often inherited and is more commonly seen in families with allergic rhinitis, allergic conjunctivitis , dry skin and asthma. I would first suggest trying non-drying cleansing bars such as dove and moisturizing the skin immediately after bathing with eucerin or a similar cream. Call your doctor if not improving.