It's a casual way of saying something is neither particularly good nor bad, but rather somewhere in the middle.
Here are some examples:
* "How are you doing?" "Oh, fair to middlin', thanks." (This means the person is feeling okay, not great, not terrible).
* "The food was fair to middlin' at that restaurant." (The food wasn't bad, but it wasn't particularly memorable either).
* "The team's performance was fair to middlin' this season." (They weren't a champion team, but they weren't a complete disaster either).
The phrase is common in Southern American English and is considered a bit folksy or rustic. It's often used in humorous contexts.