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
New farm payment rules allow LLC members to have separate limits, but some local FSA offices are still applying outdated policies, creating confusion for producers.
Farmers still earn only a small share of consumer food spending, even as post-farm costs continue to take most of the dollar.
NRECA CEO Jim Matheson joins us to discuss rural electric co-ops’ push for expanded USDA loan programs, rising energy demand from data center expansion, wildfire mitigation and other policy priorities impacting rural power infrastructure.
Farmland outlook is tracking closely with producer confidence, investment appetite, and financial expectations.
The fifth-generation operation is managing land and cattle with a long-term focus.
StoneX’s Josh Linville discusses USDA’s efforts to boost domestic fertilizer production and his outlook on supply and prices.

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:

Justin Wilson’s Shrimp and Macaroni Casserole features bold, Cajun spice and big flavors—you’ll love this easy, crowd-pleasing dish.
Slow-simmered Cajun beans cooked in corned beef stock for rich, Southern flavor—just like Justin Wilson used to make.
A rich, flavorful stock made by simmering corned beef with Cajun seasonings. Justin Wilson’s Eazy Corned Beef Stock recipe adds depth to beans, stews, and classic Southern dishes.