The phrase is used in casual, informal conversations more than in formal writing or speeches. I'm feeling fair to middling today, just hanging in there.
Pro Tip 2/3
Neutral Mood
'Fair to middling' suggests a mood that's neither too good nor too bad, expressing a balanced state. How's your day going? - It's fair to middling.
Pro Tip 3/3
Understatement
Sometimes, it is used as an understatement for modesty or to imply that things could be better. Business is fair to middling, but we're hoping it'll pick up soon.