Quite simply, it's the fat content.
Whole milk or "full-fat" milk is 3.25% fat by weight. Heavy cream is 36-40% fat by weight. These two products are at opposite ends of the fat spectrum, and there's very little difference between 1% and 3% when it comes to an item such as caramel sauce, for which the optimal ratio is about 50% fat. (A little butter can boost the fat content from 40% to 50%).
You might be able to substitute standard/single cream (18-20%) or maybe even coffee cream/half-and-half (10%), but any lower than that and you're just making sugary milk.
Other alternatives to (possibly) get it thicker:
Use (much) less milk; I'd advise not attempting a direct substitution, just find a recipe based on milk. Even the best milk-based caramel sauce will still be substantially runnier and/or grittier than a cream-based sauce.
Considering that butter is 80% fat and homo milk is 3.25%, you could use a mixture of (approximately) half milk and half butter that would emulate the fat content of heavy cream. I've never tried this personally, and I suspect that the flavour might be a little off, but at least it would be closer to the expected texture.
Try a reduction (simmer off the water in the milk). You'll be simmering a long time, and you'll have to watch it very carefully to make sure it doesn't burn, and you'll probably have a nasty stuck-on mess to clean up in the pan afterward, but it will thicken.
According to Wikipedia, buffalo milk has 8% milkfat by weight. Cow's milk is listed on that same table as 3.9%, so I'll use that figure for consistency, though the number does vary both from cow to cow and by breed.
So, you need to figure out the portions in which you'd mix together whole milk and heavy cream to reach the same fat content as your buffalo milk.
What you want is a formula in which the amount of fat from the whole milk plus the amount of fat from cream equals the amount of fat from buffalo milk. The amount of fat from the whole milk would be 0.039x, where x is the amount of whole milk, and the amount of fat from the cream would be 0.3y, where y is the amount of cream. And finally, the amount of fat that you would have from the same quantity of buffalo milk would be 0.08(x+y). Putting it together you have 0.039x + 0.3y = 0.08(x+y)
Solve for y to get y=0.18 x, or 18% as much cream as milk. If your milk truly is 3% fat, this would be closer to 22%. Lets meet in the middle at 20%, since it's going to vary anyway.
What this boils down to is that, to approximate the fat content of buffalo milk, you'd use about 200mL cream for 1L of whole milk.
Best Answer
I don't think you can get cream out of your milk - it would be homogenized by the process, and people would want their milk to be smooth and not separate out so they would take precautions against such a thing in the manufacturing. Also, a lot of the powdered milk I see sold is skim milk powder, you should be very sure you're getting full fat powdered milk even to try.
You might be able to get butter, but as far as I know butter from whole milk would be a lot of work for a relatively low yield (one reason cream is preferred, and butter was historically often made from soured milk - it was easier to get butter after culturing). Though it looks like powdered milk can be used in cheese-making (according to CMB92's link), for increasing yield of cheese or making fresh cheese (your mozzarella could qualify).
On the other hand, if you are buying in bulk, you might contact the seller and see if you can't get some packages of powdered cream along with the milk. They are likely made by the same manufacturers, and same processes, so it might be possible to substitute for part of your bulk order or else purchase additionally, or even inquire about other powdered products (buttermilk, sour cream, butter powder, etc). I've used powdered cream before...it can be a bit tricky to work with but, at least with the brand I got, you can make even whipped cream, and also butter - we almost did, from overwhipping the cream. And manufacturers recommendations usually include uses for ice cream and baking, although you will want to check by the brand you buy, since some recommendations differ. You can fortify your powdered milk for making cheese with, if you want higher fat.
And, heavens, I think it would be easier to have two or three packages to scoop out of rather than trying to reconstitute and separate the cream out of your milk (and store it up for separate uses). You might even be able to make skim milk powder work, if that is what is available, by supplementing it with cream powder to make a "whole milk".