This is an interesting question that I came across on Quora. The answer given was a good one, of course, by a frequent Quora contributor and chef. However, I decided to add a bit more explanation as I’m not sure the “math” is clear.
In low fat or reduced fat milk, 1% or 2% refers to the percentage of milk fat. The question is, then, why do we have 1% and 2% and then skip directly to whole?
Many people probably think that these numbers are expressing a percentage of the normal amount of fat in milk. So, if a quart of milk had 100 grams of fat in it, then a quart of 1% milk would have one percent of this, or 1 gram. So, the question that leaps to mind is, why not have milk with 3% or 7% fat in it?
Our 1% milk has almost NO fat in comparison to our hypothetical quart of milk with 100 grams of fat. So, why wouldn’t we want milk with say, 50% fat?
The answer is that 1% and 2% does not refer to a percentage of the fat that is normally in milk. It refers to how much fat is in the milk overall as a percentage of the total contents. That is, in a gallon of 1% milk, which is mostly water, only one percent of it is fat.
This makes more sense once you realize that whole milk, with all its fat content intact, is only 3.25% milk fat, on average. If 1% milk were only one percent of the amount of fat normally in milk, it would be a tiny amount!
Whole Milk
Whole milk, straight from the cow, is composed of about 88% water, 8.5% milk solids (protein, lactose, minerals), and 3.5% fat, give or take. These are not exact numbers. Milk varies a little bit. The FDA has a standard of identity for whole milk, as well, which calls for 3.25% milk fat.
So, in 100 grams of whole milk, we could expect 88 or so grams of water, 8.5 or so grams solids, like protein, sugar, and minerals, and 3.25 to 3.5 grams of fat. Milk already does come in something very close to 3% milk, in other words.
1%, 2% and Nonfat Milk
Low fat and reduced fat milk is simply milk in which the fat amount has been reduced down to 1%, 2% rather than containing 3.25% fat.
1% milk is called low-fat milk and 2% milk is called reduced-fat milk. Then there is nonfat or skim milk, which contains less than 0.5% milk fat.
There would not be much point at all in producing other variations milk with different fat contents, as you can see. 3% milk would be pretty much the same as whole milk, and producing varieties using half percent differences would be ridiculous.
If you want a handy reference to the various fat percentages in half and half, whipping cream, etc. see the answer from Jonas linked above.