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
Expanding bioethanol use strengthens rural economies, supports farm markets, and positions U.S. agriculture at the center of global low-carbon trade.
Elizabeth Strom with the American Society of Farm Managers & Rural Appraisers (ASFMRA) joined us to share the latest on harvest progress and market activity in her area.
“Farmers for Free Trade” warns that disaster is brewing as President Trump’s trade policy is causing farm input costs to rise even more.
NCBA CEO Colin Woodall says more conversations need to occur with stakeholders present surrounding President Trump’s proposal to lower consumer beef prices with Argentinian imports.
While artificial intelligence, or AI, is reshaping both jobs and messaging in agriculture, CoBank data suggests human expertise still matters.

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:

Freight volatility and route selection remain critical to soybean export margins and competitiveness.
Strong balance sheets still matter, but liquidity, planning, and lender relationships are critical as ag credit tightens, according to analysis from AgAmerica Lending.
Protein-driven dairy growth is boosting beef supply potential, creating an opening to support rural jobs and ground beef availability.
U.S. agriculture entered the week with mixed signals as weather, logistics, and markets shaped early-year decisions. Here is a regional breakdown of domestic crop and livestock production for the week of Monday, Jan. 19, 2026.
While short-term volatility remains a risk, softer ocean freight rates in 2026 could improve export margins.
Trade volatility and shifting export destinations increase marketing risk for producers heading into 2026.