All of the evidence points to the fact that the pigs have taken the milk for themselves. We discover this in chapter 3. The pigs make the point that they need the milk and apples because they have important jobs planning and leading the animals. This is significant because at the beginning of the revolution everyone was supposed to share everything. When the milk and apples start going to the pigs and only the pigs, there is a distinction between the pigs and other animals. The pigs are holding themselves above the common animals. They make the innocent argument that they need the milk, but it is the beginning of sneaky behavior by the pigs.
Early in George Orwell’s fable (or, perhaps, more accurately, allegory) Animal Farm, the animals are becoming increasingly agitated about their subordination to and dependence upon humans. The farm animals have begun to question the existing arrangement, in which they serve at the pleasure of man, who does, himself, contribute to the arrangement but seems to exist solely to consume the fruits of others’ efforts. As Major notes in his address to the assembled masses,
“‘Man is the only creature that consumes without producing. He does not give milk, he does not lay eggs, he is too weak to pull the plough, he cannot run fast enough to catch rabbits. Yet he is lord of all the animals. . .And what has happened to that milk which should have been breeding up sturdy calves? Every drop of it has gone down the throats of our enemies.’”
Major’s speech is revealing in Orwell’s allegorical tale about tyranny and human nature. He, of course, is a boar, and, as will be revealed in Chapter III, it is the pigs who abscond with the missing milk after Napolean, another boar’s, refrain to the assembled animals to ignore the issue of the milk: “‘Never mind the milk, comrades!’ cried Napoleon, placing himself in front of the buckets. ‘That will be attended to. The harvest is more important. Comrade Snowball will lead the way.”
The boars’ apparent diversionary tactic, and an important literary device in the story’s evolution, conceals the answer to the question of the missing milk. As Orwell’s narrator notes, “The mystery of where the milk went to was soon cleared up. It was mixed every day into the pigs’ mash.” The pigs, it turns out, conspired to keep the milk for themselves, justifying their actions on the basis of their presumed importance to the broader enterprise:
“All the pigs were in full agreement on this point, even Snowball and Napoleon. Squealer was sent to make the necessary explanations to the others. ‘Comrades!’ he cried. ‘You do not imagine, I hope, that we pigs are doing this in a spirit of selfishness and privilege? Many of us actually dislike milk and apples. I dislike them myself. Our sole object in taking these things is to preserve our health. Milk and apples (this has been proved by Science, comrades) contain substances absolutely necessary to the well-being of a pig. We pigs are brainworkers.”
The pigs, in other words, kept the milk for themselves because of their conviction that their survival and prosperity is key to the success of the animals’ plan for self-rule. That the pigs have succeeded, at least for the moment, in institutionalizing the ancient concept of ‘first among equals’ -- as would the Nomenclatura of the Communist Party of the Soviet Union in its infamous and decidedly unsocialist hierarchy – so does this early and prominent fracture in the animals’ newly established order serve as the central theme of Orwell’s story.
The milk is of course a rich source of food, and the luxury item available to the animals on the farm. When it becomes apparent that the milk has been taken by the pigs, they quickly come up with a reason for this need.
It is reasoned by Squealer that the Pigs require the milk (and apples) to feed their brains. If their brains fail, he uses the veiled threat that Mr Jones may return and take back his farm. This sneaky method of using propaganda to manipulate the thoughts and emotions of the other animals is one of the early examples of the pigs showing corruption and their less-than-desirable attitudes towards their equal society.
It is worth noting that the milk is discovered taken by the pigs, the puppies have also been taken to be raised by the pigs as well. Basically the signs to the reader about corruption, and the future enforcement of rules by military force become apparent.
The Milk was splited up and drank by both Napoleon and Snowball.