One part powdered milk yields four parts liquid milk when reconstituted with water. So you can use whatever non dairy liquid milk substitute you prefer (I use unsweetened soy milk) in four times the amount of dry powder. Then reduce whatever water the recipe calls for by that amount.
Let’s say the recipe calls for 1 Tbsp. dry milk powder. You can substitute 4 Tbsp. (1/4 cup) soy milk, and reduce the water in the recipe by 1/4 cup.
Similarly, if the recipe calls for 1/4 cup milk powder, you can substitute 1 cup soy milk, and reduce the water in the recipe by 1 cup.
Why do bread machine recipes call for milk powder and water? Why not make it simpler and just call for regular liquid milk? If it’s a bread machine with a delayed timer, milk may become unsafe if sitting at room temperature for hours during the delay. Once opened, even shelf-stable soy milk needs to be refrigerated, so keep food safety in mind if you’re using a delayed timer.
Credit
Also...
"Reconstituted soymilk powder tends to curdle at high heat and with the addition of acids. This is due to soy's natural proteins -- the same proteins that give soy a hearty texture and a rich consistency, which lends a creamier mouthfeel to baked goods, sauces, gravies and soups.
Though it doesn't thicken to the richness of soy, protein-poor unflavored powdered rice milk has a more "dairy" flavor than soy. It lacks soy's accompanying sweetness, as well as soy's tendency to curdle; however, it's much more neutral and, therefore, flexible in different types of recipes.
Almond milk powder -- essentially, a superfine grind of almond flour -- is very similar to rice milk powder in consistency and behavior. However, almond has a more mineral-rich nutritional profile than rice. Almonds' natural slight sweetness is a better match to curries or desserts than it is to savory dishes.
Coconut milk powder contains casein, a milk derivative, and is thus unsuitable for practitioners of a vegan lifestyle."
Credit