Place all ingredients but the egg whites inside a medium-sized saucepan. Bring to a slow simmer, while constantly stirring. Turn off heat, cover pot, and let stand for one hour.
Preheat oven to 300 degrees Fahrenheit. Grease six ramekins (you can use anything small and oven safe. I like to use espresso cups) and place in a pan. Position pan on a baking sheet for extra support. Fill pan halfway with hot water, making sure not to get any water into the ramekins.
Strain the milk mixture.
In a bowl, with the help of a whisk or a fork, beat up egg whites vigorously until bubbles start forming. Combine with milk mixture, mixing until well combined.
Carefully pour mixture into ramekins. Transfer to oven and bake for 1 hour and 45 minutes.
Cool and refrigerate, covered.
To serve: Run a knife around the edge of the ramekins. Place ramekins in hot water for three seconds and then invert onto a plate. Or, serve directly from the ramekins. Serve with Balsamic Strawberries.
Panna cotta will last for a week in the refrigerator.
Toss two tablespoons balsamic reduction together with all other ingredients. Let stand for at least 10 minutes before serving, so fruit will macerate and flavors will develop. Serve with Panna Cotta.
For balsamic reduction: In a small pot, heat half a cup of balsamic vinegar over medium heat. Bring to a gentle simmer. Twirl pan from time to time. After about 6-10 minutes you will see that the vinegar has reduced in volume and thickened. If you are not sure, try coating the back of a spoon with some of it. You want to see the coating adhere thickly to the spoon. Turn off flame and let cool. Store in a jar at room temperature.
Prepared in advance, Balsamic Strawberries will hold for up for five days.