The government appears to have a firm fix on drought damage, confirming a previous estimate that U.S. grain production is down 31 percent this year but should have only a modest effect on food prices.

Total grain production now is forecast at 191 million metric tons for 1988, compared to 277 million last year. The Agriculture Department estimate is based on Sept. 1 crop conditions and is the most accurate measurement yet of the impact of the drought that began in the spring.