The agency also reported that crop insurance companies have agreed to allow for a "short grace period for farmers on insurance premiums in 2012," giving farmers an extra 30 days to make payments without interest penalties on their unpaid premiums.
But while a variety of crops are strained across the U.S. Midwest, a top concern for policy-makers is corn.
"The unusually hot and dry conditions coincide with the period of pollination and kernel formation, which sharply reduces estimated yields," the USDA reported. "As of July 17, approximately 88 percent of the corn crop was in regions impacted by drought."
About 75% of all food found in the supermarket contains corn, officials say.