Stir together 1 cups sugar, the butter, milk, vanilla, peppermint extract and egg in a large bowl. Stir in flour, baking powder and salt. Divide dough in half. Stir food color into 1 half. Cover and refrigerate at least 4 hours.
Heat oven to 375° F. Stir together peppermint candy and 2 tablespoons sugar; set aside.
For each candy cane, shape 1 rounded teaspoon dough from each half into a 4-inch rope by rolling back and forth on floured surface. Place 1 red and white rope side by side; press together lightly and twist. Place on ungreased cookie sheet; curve top of cookie down to form handle of cane.
Bake 9-12 minutes or until set and very light brown. Immediately sprinkle candy mixture over cookies. Remove from cookie sheet to wire rack. Cool completely, about 30 minutes.
Originally Submitted
1/25/2012
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