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Add milk, rice, sugar, butter or margarine and salt to 3-quart saucepan.
Over medium heat, heat milk mixture until tiny bubbles form around the edge, stirring mixture frequently. Reduce heat to low; cover; simmer 1 hour or until rice is very tender, stirring occasionally. Stir in vanilla.
Cover and refrigerate until well chilled, about 3 hours.
To serve: spoon rice pudding into dessert dishes; sprinkle each serving with nutmeg.