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Step 1
Preheat oven to 350 degrees F. Coat a 9-by-13-inch baking pan with cooking spray.
Step 2
Place potatoes in a large saucepan and cover with water. Bring to a boil, reduce heat to medium and cook, covered, until barely tender, 10 to 12 minutes. Drain, cool and slip off skins.
Step 3
Coarsely shred the potatoes in a food processor or with the large-holed side of a box grater.
Step 4
Place onion, garlic, flour, salt, dry mustard, cayenne and black pepper in a food processor; pulse until finely chopped. Add 1/2 cup milk and process until smooth. Scrape into a medium saucepan and add the remaining 2 1/2 cups milk. Bring to a simmer over medium heat, stirring constantly. Simmer, stirring, until thickened, about 5 minutes. Remove from heat and stir in 1 cup Cheddar until melted.
Step 5
Combine the potatoes and the cheese sauce. Transfer to the prepared pan. Combine the remaining 1/3 cup cheese, breadcrumbs and oil in a small bowl and mix with your fingers. Sprinkle the crumb mixture evenly over the potato mixture.
Step 6
Cover the pan with foil and bake for 40 minutes. Uncover and bake until golden brown and bubbling, about 20 minutes more. Let stand for 10 minutes before serving.