Jeff sent me a nice email, citing my website as the starting point he needed to track down a mystery in the ingredients list.
Following a link I originally got from one of your pages led me eventually to the first actual explanation I have seen of what exactly “modified milk ingredients” signifies in an ingredient list. From: MilkIngredients.ca.
What is meant by the description: Modified Milk Ingredients?
The term "Modified Milk Ingredients" can be used on a product label where the formulation call is for a blend of a dairy by-product (such as whey) with a milk-based ingredient (such as skim milk powder/whole milk powder.) Rather than list the ingredients separately, the manufacturer is able to use this generic description which also allows for changes to be made to the dairy formulation at a later date without having to re-do the label information on the packaging material. In this scenario the product has been "modified" by mechanical means.
The use of the term "Modified" in this case should not be confused with the term "Genetically Modified Organism" (GMO) which involves a product/ingredient for which the composition has been altered chemically or genetically from its original form.
Remember that this answer is taken off of a Canadian site so the technicalities may not be exactly equivalent under U.S. law. It should still be close enough to warn you that the contents will be a dried milk powder and dried milk powders are high in lactose.