What a fun and easy project.
1. string cereal on ribbon,
2. tie in circle,
3. hang on tree (make sure you hang on a branch with one under for the bird to perch on).
note: I tried twine and string first, but they did not make it through the cereal as well. It worked much better with a thin ribbon with a taped end.
Great workout for those little fingers, not messy (especially if you have a dog to eat up any dropped cereal), no expensive materials, and no worries about the little ones putting the materials in their mouths. My boys loved it.