Way to insert automator output at the cursor

This AppleScript will launch a Terminal window with the command you specified:

on run {input, parameters}
    tell application "Terminal"
        activate
        set filesString to ""
        repeat with file_ in input
            set filesString to filesString & " " & quoted form of (POSIX path of file_)
        end repeat
        do script "for f in" & filesString & "; do
/usr/local/bin/ffmpeg -i \"$f\" -c:v libx264 -vf yadif -pix_fmt yuv420p -crf 21 -preset slow -movflags faststart -c:a copy ${f%.*}_h264_yadif.mov
done"
    end tell
    return input
end run

Create a “Run AppleScript” action in Automator and paste it in there.

I think there is a security setting in Mavericks (and possibly Mountain Lion) that causes Automator not to allow system control. See this question

Open your Console and watch the logs when you run the service. In my case, it crashes when I try to run a shell script.

I tried adding Automator to the Security and Privacy preferences, but it did not solve the issue.

As a work around, you may have to use applescript to create and app, tie that to a service, and add the app to the Privacy tab of your Security and Privacy preference pane.