The most common and most likely answer to this crossword clue is the 7 letter word WAFFLES
I've seen this crossword clue in The Guardian
W
A
F
F
L
E
S
Buddy explains!

The straight part
We know that "They make a dish with iron" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case they make a dish with iron = waffles.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does WAFFLES mean?
WAFFLES noun- A flat pastry pressed with a grid pattern.
- A potato waffle, a savoury flat potato cake with the same kind of grid pattern.