More than half of the nation's counties have been designated as disaster areas, mainly because of an ongoing drought, officials announced Wednesday.

Disaster designations were signed for 218 more counties in 12 states, Agriculture Secretary Tom Vilsack announced. That brings this year's total to 1,584 counties in 32 states, or 50.3 percent of all U.S. counties; more than 90 percent of those designations are because of drought conditions.

The latest designations were in Arkansas, Georgia, Iowa, Illinois, Indiana, Kansas, Mississippi, Nebraska, Oklahoma, South Dakota, Tennessee and Wyoming. Washington state is one of 18 states that has escaped the drought so far.

Although the drought is expected to have some impact on food prices, the increases are months off. Meanwhile, the federal government has been concentrating on helping beleaguered farmers and ranchers.

Vilsack announced the government is opening up approximately 3.8 million acres of conservation land for grazing and haying so that livestock producers can deal with shortages of pastureland and hay.

Further, he said, crop-insurance companies have agreed to provide a grace period for farmers who need more time to pay premiums. Farmers will have an extra 30 days to make their payments without a penalty.

"President Obama and I will continue to take swift action to get help to America's farmers and ranchers through this difficult time," Vilsack said. "The assistance announced today will help U.S. livestock producers dealing with climbing feed prices, critical shortages of hay and deteriorating pasturelands. Responding to my request, crop-insurance companies indicated that producers can forgo interest penalties to help our nation's farm families struggling with cash-flow challenges."

In South Dakota, where roughly three-fifths of the state is in severe or extreme drought, Vilsack earlier had allowed emergency haying and grazing on about 500,000 conservation acres, but not on the roughly 445,000 acres designated as wetlands.

His decision to open up some wetland acres in several states will give farmers and ranchers a chance to get good quality forage for livestock, federal lawmakers said.

"The USDA cannot make it rain, but it can apply flexibility to the conservation practices," said Sen. Tim Johnson, D-S.D.

The potential financial fallout in the nation's midsection appears to be intensifying. The latest weekly Mid-America Business Conditions Index, released Wednesday, showed the ongoing drought and global economic turmoil is hurting business in nine Midwest and Plains states, boosting worries about the prospect of another recession, according to the report.

Creighton University economist Ernie Goss, who oversees the index, said the drought will hurt farm income while the strengthening dollar hinders exports, meaning two of the most important positive factors in the region's economy are being undermined.

The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

According to the Drought Monitor, 66 percent of the nation's hay acreage and about 73 percent of the cattle acreage are in areas experiencing drought, according to the USDA.

The picture is equally grim when it comes to crops. According to the department, 37 percent of soybeans were rated poor to very poor, matching the poorest conditions since the drought of 1988. About 48 percent of the U.S. corn crop was rated very poor to poor.

Prices on corn and soybeans have been rising, but it takes time for the increase to work its way through the food chain. The first areas to feel the pressure usually are dairy products, while processed foods take longer.

There are many factors that determine the price of goods on supermarket shelves. A diminished corn supply doesn't mean all food prices will be affected the same way.

In fact, you're more likely to see higher prices for milk and meat than corn on the cob. That's because sweet corn is grown differently and is not as vulnerable to drought conditions. As for corn used as grain feed for cows, however, farmers are paying more as the drought persists.

"The financial stress is starting to mount because the bills (to feed the cows) are bigger than they were six months ago," said Chris Galen, a spokesman for the National Milk Producers Federation. "What will consumers will see as a result? That's where it gets a little murkier."

One major factor that complicates the equation is the amount that supermarkets decide to mark up foods. Because supermarkets are facing stiffer competition from big-box retailers and drugstores, they are much more judicious about how much of their rising costs they pass on to customers.