Fresh liquid milk is a highly nutritious food, but it's equally perishable. Without refrigeration or other preservation measures, it can only remain usable for a day or two. Dry powdered milk is much more stable, remaining usable for months or years if it's in an airtight package and properly stored. Most powdered milk is made with non-fat skimmed milk, because the fat in full-fat milk makes it prone to spoilage. For baking purposes, you can replace the missing milk fat with ordinary cooking oil.
Doing the Math
Converting dry milk powder back into non-fat milk is a straightforward process, requiring three parts water to one part powdered milk. Whole milk is 3.5 percent fat, while skim or nonfat milk contains just 0.5 percent fat. To make the equivalent of whole milk for baking purposes, you'll need to calculate the 3 percent difference. For example, a quart of milk is 32 ounces. Three percent of 32 ounces is just under one fluid ounce, or two tablespoons. For two cups of milk use one tablespoon of oil, or for one cup use 1.5 teaspoons. Pour it into your mixing bowl with the remaining wet ingredients, or as directed.