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In a bowl, dissolve yeast in water. Add milk, sugar, shortening, egg, celery seed, sage, salt, nutmeg and 3 cups flour; beat until smooth. Add enough remaining flour to form a soft dough. Turn onto a floured surface and knead until smooth and elastic; about 6-8 minutes. Place in a greased bowl, turning once to grease top. Cover and let rise in a warm place until doubled, about 1-1/2 hours. Punch dough down; let rest 10 minutes.
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Divide dough into 24 pieces. For each bunny, roll one piece of dough into an 18-in. rope. Cut rope into one 10-in. piece, one 5-in. piece and three 1-in. pieces. Coil 10-in. piece for body; place on a greased baking sheet. Coil 5-in. piece for head; place next to body. Form ears form two 2-in. pieces; place next to head. Form tail from third 1-in. piece; place next to body. Pinch and seal pieces together. Repeat, placing bunnies 2 in. apart on the baking sheet. Cover and let rise until doubled, about 45 minutes.
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