I can't find very many citations of this phrase. I wonder where Eric H found it? "Half again" usually means to increase something by 50%. "Halve and halve again" means to cut something in half and then cut the half in half, leaving one-fourth of the original. "Half and half" is, indeed, the vernacular phrase for a dairy product that is one-half whole milk and one-half cream. As Gmilam notes, it is commonly used as a coffee creamer: cheaper than pure cream but almost satisfying the same purpose. Perhaps Eric found a sentence such as, "We've been drinking a lot of coffee lately, so we're almost out of half-and-half again."
