Put room temperature milk and the lemon juice or white vinegar into a large container. Let it sit at room temperature overnight. It will form curds. In the morning, line a large strainer with cheesecloth. Carefully pour the curdled milk through the cheesecloth and drain off all the liquid. Return the curds to the large container.
Wearing a mask, put a cup of water into a small container. Pour in the hydrated lime and stir until it is smooth. Put 1/2 cup water into another small container and add 1/2 cup powdered pigment. Stir until smooth.
Stir the hydrated lime paste into the milk curds and stir until smooth. Add the pigment paste a little at a time, stirring to blend completely, until you have the depth of color you want. If the paint isn't as smooth as you want it to be, strain it again through cheesecloth or through a paint strainer.
Use a bristle paint brush to apply the milk paint to a prepared surface, on furniture or on your wall and trim. It dries quickly and can be somewhat streaky, which is part of its character. Overlap strokes and paint quickly so the paint stays wet until you are finished with each area.