The governing equation of milling processes is generalized with the help of accurate chip thickness derivation resulting in a state dependent delay model. This model is valid for large amplitude machine tool vibrations and uses accurate nonlinear screen functions describing the entrance and exit positions of the cutting edges of the milling tool relative to the workpiece. The periodic motions of this nonlinear system are calculated by a shooting method. The stability calculation is based on the linearization around these periodic solutions by means of the semidiscretization method applied for the corresponding time-periodic delay system. Predictor-corrector method is developed to continue the periodic solutions as the bifurcation parameter, that is, the axial immersion is varied. It is observed that the influence of the state dependent delay on linear stability can be significant close to resonance where large amplitude forced vibrations occur. The existence of an unusual fold bifurcation is shown where a kind of hysteresis phenomenon appears between two different stable periodic motions.