One Australian offers explanations.
From: firstname.lastname@example.org (Kim Sebo) Subject: milk
OK, here's my attempts at explaining the mysterious milk jokes.
Whats brown, squeaks and it covered with milk? "Mice bubbles" Play on words - "rice bubbles" are a breakfast cereal (which you put milk on) You know - snap crackle and pop? Maybe called something else in US?
The cow/sheep/goat: (a milky baa kid) Well, its obviously "milky bar kid" - a milky bar is one of those white milk chocolate bars. I think there was an ad campaign featureing the concept of a milky bar kid (a kid who eats milky bars)
Who's the most versatile milkman in Australia? "Laurie Daley" Hmm, this is a tough one. The milk people sponsored the Canberra Raiders. So, in that sense, he is a "milk-man". versatile coz he plays rugby and is also a 'milk-man'. Yeah, I know - the connection is very very tenuous.
More Australian answers:
From: LRoyes@dca.gov.au Subject: Milk joke
I think the Laurie Daley joke is a play-on-words- he drives a "lorry" (when delivering milk) and he does it Daley. I want to say this is no way indicative of an Australian sense of humour.
From: email@example.com (James Dash) Subject: your comments on MILK jokes
Is this an indication that our prejudices about the closed minds of Americans abroad are well founded? Did you watch any Raiders [Rugby League] games in person or on TV? If so, you must have been impressed with the captain Laurie Daley's versatility. He has a milk delivery run.
In future, send Americans who try to SEE what is around them. We try to welcome every visitor, but then you put stupidity like that on the Web. Some people, particularly Americans, will probably be unduly influenced against giving it a go.
From: Amanda Rader
Subject: Milk Jokes Date: Fri, 13 Feb 1998
Hi! I was looking at your page of milk jokes and I came up with a couple of ideas: The joke about crossing a sheep/cow/goat and getting Milky Baa Kid--I think this may be a play on the name of the famous outlaw, Billy the Kid. I don't know about the Milky Bar thing--I've never heard of those! The mice bubbles joke--I didn't get this one at first, because I had no idea what rice bubbles were, but then I realized they must be similar to the cereal Rice Krispies here in the US. I don't know what, if any, use this info may be to you--I just felt the need to pass it on. :)