The burden of low-quality diets and childhood undernutrition is widespread in rural areas in Sub- Saharan Africa, where households rely mostly on agriculture. Various empirical studies have shown the relative importance of the market, and hence food purchases, compared with farm diversification in raising dietary diversity. But are these findings applicable to all food markets? In the case of highly perishable milk, which characterises its production in rural Africa, and the low community ownership of cows, an important research question is whether milk is available in markets and whether milk purchases contribute to the nutrition of children in smallholder households. Using panel data from rural Uganda, we estimate conditional mixed-process models and find positive effects of both household milk production and milk purchases on height-for-age z-scores. We find that milk purchases and milk production are complements, and therefore a strategy combining increases in milk productivity, dairy market development and social protection programmes to increase economic access to milk markets could improve child nutrition.