In a small bowl, whisk together the softened cream cheese, powdered sugar, vanilla extract, and milk until smooth to create the dip. Set aside.

In a separate shallow dish, mix the 1/2 cup granulated sugar with a pinch of cocoa powder (optional) for the coating.

In a medium saucepan, combine water, 2 1/2 tbsp sugar, salt, and 2 tbsp vegetable oil. Bring to a boil over medium-high heat.

Remove the pan from the heat immediately. Stir in the flour and 1 tbsp cocoa powder vigorously with a wooden spoon until a ball of dough forms.

Add the red food coloring to the dough and mix until the color is evenly distributed. Let the dough cool for 5 minutes.

Transfer the dough into a piping bag fitted with a large star tip.

Heat the frying oil in a deep skillet or pot to 375°F (190°C).

Carefully pipe 4-inch strips of dough into the hot oil, using scissors to cut the dough from the bag.

Fry 3-4 churros at a time for about 2-3 minutes per side, or until they feel crispy.

Remove churros with a slotted spoon and drain briefly on paper towels.

While still warm, roll the churros in the coating sugar mixture.

Serve immediately with the cream cheese dip.