I know about the use of dative case, or nominative case, as illustrated here: How does "следует" behave towards "должен", "надо" and "нужно" when talking about things 'one must/should/etc. do', and that is why I am confused about why this sentence;
Хлеб надо резать острым ножом.
shouldn't actually be;
Хлебу надо резать острым ножом.
Doesn't the bread need a sharp knife, like I need to drink water,
Мне надо пить воду.