Combine milk, coconut and butter in a saucepan. Cook over low heat for 15 minutes, stirring constantly to avoid scorching, until thick – mixture will form a mass. Let it cool until you can handle it.
Place extra coconut in a flat tray and have paper cups ready. Using buttered hands, take a marble-sized piece of the mixture and roll between your palms into a uniform ball. Roll in shredded coconut and place in cups.
Store at room temperature.