Data Centers Expand into Rural Areas Competing with Agriculture

Data centers may compete with farms for key resources.

LUBBOCK, TEXAS (RFD NEWS) — Data centers are rapidly expanding into rural areas, raising new concerns about competition for land, water, and electricity with agricultural operations. Texas A&M AgriLife economists say the impact will depend on how these facilities use local resources and how communities manage development.

Texas is emerging as a major hub, with about four gigawatts of data center capacity already in place and nearly eight gigawatts under construction. Large-scale facilities can span hundreds of acres and operate continuously, consuming as much electricity as a small city.

Farm-Level Takeaway: Data centers may compete with farms for key resources.
Tony St. James, RFD NEWS Markets Specialist

That demand could strain rural power systems. Year-round electricity use may drive higher rates and increase grid pressure, especially during peak summer irrigation periods. Water use is also significant, with some facilities requiring more than a million gallons per day, adding pressure on groundwater resources in key aquifers.

Land use is another concern. Once converted, these sites rarely return to agriculture. While data centers can generate tax revenue, they create relatively few long-term jobs.

Related Stories
RFD-TV Legal Expert Roger McEowen with Kansas’ Washburn School of Law breaks it down in his latest Firm to Farm blog post.
John Deere is cutting 100 positions from its Waterloo Works plant in 2025, and Butterball will cut 200 positions in Jonesboro, Ark.
RFD-TV ag law and tax expert Roger McEowen with the Washburn School of Law dives into common disputes over boundaries and conflicting surveys in agriculture.
RanchHERs Penny Kasun and Dani Jeanne Lawrence of 7-Up Ranch in Prescott, Arizona, joined us Monday on Market Day Report to discuss the next all-new episode of the show.
Key legal & tax insights for farmers, like accumulated earnings tax, using 401(k) to start farming, ag data in court, and maximizing farm home-sale exclusions when selling your farm.

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

LATEST STORIES BY THIS AUTHOR:

David Hardin with the Indiana Soybean Alliance discusses USMEF’s push to open new global export markets for both meat and soy-based feed.
Some sustainability shifts are not particularly challenging and can be implemented with resources already available to farmers and ranchers on their operations.
With the U.S.–Vietnam agreement nearing signature, U.S. cotton, corn, and soybean exporters could lock in new demand lanes just as global supply shifts.
The government reopens after 43 days. USDA resumes key reports, weighs farm aid, and watches China’s next move on U.S. soybean purchases.
Jeramy Stephens with National Land Realty shares tips for fall and winter to guide landowners and farmers.
RealAg Radio host Shaun Haney shares insights from a recent study, discusses EV market access in Canada, and highlights other market opportunities top of mind for Canadian producers.