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I use all butter, and I use a food processor to make the dough. That way I don't have to try and cut in the butter by hand. And the only cold ingredient I use is ice water. I make my own pie crusts every year. One of these days I plan to try lard instead of butter.
I have made pie crust in a food processor before and never could figure out why it was not as flakey as pie crust made with a hand held pastry blender - until I took a fabulous cooking class from a caterer and she explained why food processor made crust is not as flakey.
When the pieces of fat are irregular (as in dough where the fat is cut in with two knives or a pastry blender) rather than identical (as they are in food processor made dough), the irregularly shaped fat creates more pockets of air as it is layered in the pastry - thus creating a flakier crust. Not to say that food processor pastry isn't good - it is...just not as flakey and toothsome.
You could definitely overwork a pie crust in a food processor, that's why I don't make it in entirely in one. I just like to start off the dough that way. Here's a website that best describes how I do it with a food processor:
A food processor works great—to a point. Many bakers only make pie crust by hand, swearing that this is the only way to control the dough. Others use the food processor exclusively, exulting in the ease and convenience. I use a processor for the first step—cutting the fats into the flour, which works really well (see my Flaky Pie Pastry recipe for details). The trick is to keep an eye on the consistency of the fat and flour.
Why go to that mess of having to clean a food processor when you can mix it with a pastry blender and get beautiful results - I've done both and believe me hand blended makes a flakier crust and less clean-up.
2 1/2 cups flour
2 sticks butter
1 TBSP sugar for sweet, none for savory
1 tsp salt
ice cold water as needed
I've always only used butter, comes out great and flakey.
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