It has been uttered by Master Gardeners and other composting educators for many years as a tool for determining, and teaching about, the balance of moisture in the composting process.
Balance is the key word because, while moisture is necessary, too much can be detrimental.
The squeeze-test mantra goes on to say that if you cannot squeeze any water out of the handful, the material is too dry and if water trickles out without squeezing, it is too wet. Although the squeeze-test is useful, and often sufficient, for monitoring moisture in the composting process, it loses utility as the scale of composting grows larger and management becomes more scientific. Simply squeezing material is subjective and inexact, and it does not provide a quantitative measure of the moisture content. Therefore, composters have come to rely on other techniques to gauge moisture in the materials being composted and the compost produced. Such techniques range from the standard of drying and weighing samples to more recent electronic sensors that furnish an immediate reading or output signal.