So this blew my mind today.
Apparently, before WWII, people made a plastic-like material out of milk, specifically the protein in milk, casein. At first I was under the impression that this material was made possible by the additive formaldehyde, a product of the Industrial Revolution, but there are videos of people making milk-plastic with nothing but milk and vinegar, the same ingredients used to make simple cheeses. There's a more scientific guy with a video that explains to get good milk plastic, you need to add an alkali ingredient, which could be lye if you have it handy. He then links to a milk plastic manual published in 1907 that explained how to make all manner of substances out of casein, including artificial ivory, artificial leather, glues, paints, and various industrial applications.
Quick milk+vinegar example:
https://www.youtube.com/watch?v=VFvik_THcNQThe more scientific version:
https://www.youtube.com/watch?v=BnXGZKCrktEThe 1907 book manual:
https://archive.org/details/caseinitsprepara00scherichAccording to the preface of the manual:
For many years the sole use of milk curd was as a foodstuff, and it is only through the scientific researches of the past few decades into the albuminoid substances that attempts have been to utilise this body technically.
It seems unbelievable to me that while cheese-making is known since prehistory, and evolved into so many forms, no human managed to leave the curds out overnight and realize, hey, this stuff could be useful. Instead, it took until some scientist in the 1800s completely dissected the chemical structure of mammalian soma and discovered that the component parts could be valuable other than as a comestible. There are times when I feel like the gods just download the latest patch and science suddenly flings itself into the future by leaps and bounds (the Cannae-drive is another example of this).
Other than the sad fact that human history failed to stumble upon this hidden potential for thousands of years, I don't see why dwarves could not produce milk plastics. I'm not yet especially knowledgeable about the potential uses or physical characteristics of milk-plastic, but I plan to mix up a few batches in the near future. Input would be appreciated.
As for the rest of milk-plastic's history, during WWII, milk was rationed and thus only used as food. During and after WWII, science had discovered petroleum based plastics, which were easier to work with, and milk-plastic was abandoned. However, in today's environmentally conscious society, non-fossil-fuel biodegradable milk plastic could become more attractive once again.