This is the MMF recipe I use for all our cakes. I usually double the recipe, and add the food coloring after I've melted the marshmallows and before I add the powdered sugar. You may have to make the color a little darker than you need because it lightens up after you add the powdered sugar.
16 oz. (not 2 cups) white mini marshmallow
2-5 Tablespoons water
2 pounds (8 cups) powdered sugar (Sifted)*
1/2 cup Crisco shorting ( you will be digging into it so place in a very easily accessed bowl)
*Be sure to sift the powdered sugar it makes everything a whole lot easier!
*NOTE: Please be careful, this first stage can get very hot!
*Melt marshmallows and 2 tablespoons water in a microwave or double broiler: Put the bowl in the microwave for 30 seconds, open microwave and stir. Put back in microwave for 30 seconds more, stir again, and continue doing this until completely melted. It usually takes about 2 1/2 minutes total. Stir 3/4 (6 cups) of the powdered sugar into the marshmallow mix.
*Now grease your hands GENEROUSLY-palms, backs and in between fingers, than heavily grease the counter you will be using and dump the bowl of marshmallow/sugar mixture in the middle.
*Start kneading like you would bread dough. Add the rest of the powdered sugar and knead some more. Re-grease your hands and counter when the fondant is sticking. If the mix is tearing easily, it is too dry, so add water (about 1/2 tablespoon at a time then knead it in). It usually takes me about 8 minutes to get a firm smooth elastic ball so that it will stretch without tearing when you apply it to the cake.
*It is best if you can let it sit, double wrapped, overnight (but you can use it right away if there are no bits of dry powdered sugar). If you do see them, you will need to knead add maybe add a few more drops of water.
*Prepare the fondant for storing by coating it with a good layer of Crisco, wrap in a plastic -type wrap product ad then put in a resealable or Ziploc bag. Squeeze out as much air as possible.
*MMF will hold very well for weeks. Take advantage of the fact that this fondant can be prepared well in advance.