How do you assign structs into an array?

In general, it's a really bad idea to include header information in the file about the number of entries in the file. You want to be able to do stream processing, and that will be more difficult if you need that meta-data. More importantly, it is important to understand how to write the code so that you don't need it. It's not really that difficult, but for some reason people avoid it. One simple approach is just to grow the array for each entry. This is horribly inefficient, but for the sake of simplicity, here's an example that expects the file not not include that first line:

#include <stdio.h>
#include <stdlib.h>
#include <stdbool.h>
#include <ctype.h>
#include <limits.h>

#define STRSIZE 128
struct PItem{
    char name[STRSIZE];
    int amount;
};

struct PInven{
    int count;
    struct PItem *PItem;
};

static void
grow(struct PInven *p)
{
    p->PItem = realloc(p->PItem, ++p->count * sizeof *p->PItem);
    if( p->PItem == NULL ){
        perror("out of memory");
        exit(1);
    }
}

int
ReadInProduce(struct PInven *P, const char *path)
{
    FILE * PinFile = fopen(path, "r");
    if( PinFile == NULL ){
        perror(path);
        exit(1);
    }
    char fmt[64];
    int max_len;
    max_len = snprintf(fmt, 0, "%d", INT_MAX);
    snprintf(fmt, sizeof fmt, "%%%ds %%%dd", STRSIZE - 1, max_len - 1);

    grow(P);
    struct PItem *i = P->PItem;
    while( fscanf(PinFile, fmt, i->name, &i->amount) == 2 ){
        i += 1;
        grow(P);
    }
    P->count -= 1;
    fclose(PinFile); /* Should check for error here! */
    return P->count;
}

int
main(int argc, char **argv)
{
    struct PInven P = {0};
    char *input = argc > 1 ? argv[1] : "produce.txt";
    ReadInProduce(&P, input);
    struct PItem *t = P.PItem;
    for( int i = 0; i < P.count; i++, t++ ){
        printf("%10d: %s\n", t->amount, t->name);
    }
}

As an exercise for the reader, you should add some error handling. At the moment, this code simply stops reading the input file if there is bad input. Also, it would be a useful exercise to do fewer reallocations.

you should change Structure of PInven to it can save a dynamic array of Pitem with a Pitem pointer.

tested :

#include <ctype.h>
#include <stdbool.h>
#include <stdio.h>
#include <stdlib.h>

#define STRSIZE 21

typedef struct {
    char name[STRSIZE];
    int amount;
} Pitem;

struct PInven {
    int count;
    Pitem *pitem;
} Pinven;  // this needs to be an output file

int main() {
    // read in file and check to see if the file exist or not.
    FILE *PinFile = fopen("produce.txt", "r");
    if (PinFile == NULL) {
        printf("ERROR: WRONG FILE");
    } else {
        printf("I did it!!\n");
    }
    // assigning the value gotten into the struct variable(but need to maybe
    // change this since it needs to be an output)
    fscanf(PinFile, "%d", &Pinven.count);
    Pinven.pitem = (Pitem *)malloc(sizeof(Pitem) * Pinven.count);
    printf("%d\n", Pinven.count);
    int i;
    for (i = 0; i < Pinven.count; i++) {
        fscanf(PinFile, "%20s %d", Pinven.pitem[i].name,
               &Pinven.pitem[i].amount);
        // printf("%s %d\n",Pinven.pitem[i].name, Pinven.pitem[i].amount);
    }

    for (i = 0; i < Pinven.count; i++) {
        printf("%s %d\n", Pinven.pitem[i].name, Pinven.pitem[i].amount);
    }

    // making an array to hold the variables
    // FILE * PoutFile = fopen("produce_update.txt","w");
    fclose(PinFile);

    // remember free
    free(Pinven.pitem);

    return 0;
}