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The flakes chase after the magnet at varying speeds.
One would think that "iron-enriched" cereals would contain a source of the Fe3+ ion. This is not the case. As it turns out, there are tiny pieces of iron metal in the cereal. While this seems a little strange at first, it should be noted that stomach acid reacts with the iron to produce the Fe3+ ion anyway, so your body gets what it needs in either case.
The distribution of these pieces of iron is random, as proven by the varying speeds of the flakes involved. When a flake has more iron in it, it will chase after the magnet at a faster rate.
An alternative version of this demonstration involves placing a sample of flakes in water and adding it to a Berzelius beaker equipped with a stirring bar. After a few minutes of vigorous stirring, if a strong magnet is held at the side of the beaker, one can discern a dark spot where the maget is applied. This dark spot is iron metal.
An NSF funded Project