"The milk is by the cheese."
Translation:Die Milch ist bei dem Käse.
Well, I'm no expert, but there is I believe a subtle difference. Neben means near, which could mean in the same aisle of the supermarket, whereas bei, means by, which suggests right next to it. I could be wrong and I'm sure a German speaker would use either. Please correct me if I'm wrong.
A noun after bei needs to be in the Dative case (and it's the third case taught by Duolingo, hence the third case), so "der Käse" would be "dem Käse".
Beim does work here: bei + dem = beim.
So now we can say:
Die Milch ist bei dem Käse.
Die Milch ist beim Käse.
Yes, that's correct. Example: "the veggies are on the cutting board, and the milk is by the cheese."
I wrote as the translation from English to German " Die Milch ist beim Käse". Duo marked it as correct and added the message "Another correct solution: Die Milch ist bei dem Käse" I found having this alternative correct answer really useful. It would be great if it could happen in other sentences.