The U.S. Department of Agriculture (USDA) has a long-established system for fruit and vegetable grades (USDA, Agriculture Marketing Service (AMS) 1990). A primary purpose of federal commodity grades is to facilitate the wholesale exchange by allowing sale by description rather than by inspection (Office of Technology Assessment 1977). Consequently, buyers and sellers can consummate transactions without the time and expense necessary to physically congregate in one location to inspect the commodity being sold. The result is lower transaction costs, which in turn can mean lower prices for consumers and/or higher prices for producers. Current grade standards for fruits and vegetables use attributes based on sensory characteristics,2 shelf-life considerations, palatability, or a combination of these factors. During recent years "health consciousness" has increased among consumers. Furthermore, a growing number of studies has demonstrated health benefits from various nutrients contained in relatively large amounts in fruits and vegetables (e.g., Consumer Reports 1992, p. 648). Consequently, questions arise about the feasibility and desirability of incorporating nutrient attributes into current standards or replacing the current sensory-based standards with nutrientbased standards. These possibilities provide the impetus and focus for this research.3 Initially, we focus on the economic function and consequences of commodity grades and describe the current federal grading system for fruits and vegetables. From this description, we generate some generic components of the current federal grade standards and discuss the potential for adding nutrient attributes and the relationship between sensory and nutrient attributes. We conclude by evaluating the feasibility of a nutrient-based grading standard for fruits and vegetables.