What does mustard have to do with excellence?
It’s not clear exactly why we say 
cut the 
mustard. Some have proposed literal derivations, such as cutting down (harvesting) mustard plants. Others have suggested connections to the phrase 
pass muster, when a solider gets approval after troops are assembled together for inspection. Evidence for these origins are wanting.
Clues can be found in earlier 
mustard expressions. 
Mustard adds spice, zest, 
piquancy. This may not be obvious in everyday yellow mustard, but slather some English mustard like Colman’s on your frankfurter … and you’ll be feeling the heat!
That’s why, as early as the 1600s, 
hot/strong/keen as mustard was a figure of speech for something extremely powerful, passionate, or enthusiastic. These qualities are very admirable or desirable, so it’s perhaps no surprise that 
mustard took the jump to connotations of “genuine, superior, excellent.”
Earlier in the 20th century, people even went around calling each other 
mustard! 
He’s mustard, for example, means “He’s great.” It’s this idea, of 
mustard as “excellent” or “great,” that seems to be at work in 
cut the mustard.