A drought ranging from Indiana to Arkansas to California is damaging crops, rural economies and threatening to force food prices to record levels, according to Bloomberg.

On July 11, the U.S. Department of Agriculture declared more than 1,000 counties in 26 states natural-disaster areas, according to the article. That's the biggest declaration of its kind.

"It might be a $50 billion event for the economy as it blends into everything over the next four quarters," Michael Swanson, agricultural economist at Wells Fargo & Co. in Minneapolis, the biggest commercial agriculture lender, told Bloomberg. "Instead of retreating from record highs, food prices will advance."

The drought is the worst since 1988, the USDA told Bloomberg. The USDA also cut its forecast for the corn harvest by 12 percent, estimates that could get worse if the drought continues, Brandon Kliethermes, a senior economist with IHS Global Insight's agriculture group in Columbia, Mo., told Bloomberg.

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