All animals need some iron, as with all metals, even those considered toxic.
For good growth and health, living things require varying amounts of "heavy" or "toxic" metals in the diet. iron, cobalt, copper, manganese, zinc, etc.. To determine the amount that is harmful is probably beyond the scope of a forum discussion.
Excessive levels can be harmful. Other heavy metals such as mercury and lead are toxic and their accumulation, over time, can cause serious illness. Certain elements that are normally toxic are, for certain organisms or under certain conditions, beneficial. Since the topic is iron, I'll forgo discussion of vanadium, tungsten and cadmium.
As the saying goes, "all things in moderation". I avoid rusty water or rusty feed containers.