In a small bowl, soak poppy seeds in milk for 30 minutes. Place egg whites in a large mixing bowl, let stand at room temperature for 30 minutes.
In another large mixing bowl, cream the shortening, sugar, vanilla. Combine flour and baking powder, add to creamed mixture alternately with poppy seed mixture. Beat egg whites until soft peaks form, fold into batter.
Pour into a greased 13 x 9 baking dish. Bake at 375 degrees for 25-30 minutes or until toothpick comes out clean. Cool on a wire rack.
For frosting, in a small mixing bowl, beat the cream cheese, butter, and vanilla until smooth. Gradually beat in powder sugar. Spread over cake. Store in the refrigerator.